For more than 35 years there has been experimental evidence that parallel fiber activity does not generate the beams of activated Purkinje cells hypothesized on the basis of cortical anatomy and assumed by most theories of cerebellar cortical function. This paper first reviews the evidence for and against the parallel fiber beam hypothesis, and then discusses the findings of our recent experimental and model-based investigations intended to better understand parallel fiber effects on Purkinje cells. A principal conclusion of these studies is that the excitatory effects of parallel fibers on Purkinje cell dendrites are modulating and must be considered in the context of a balancing inhibitory influence provided by molecular layer interneurons to these same dendrites. It is proposed that this association of excitation and inhibition can account for the lack of beam-like effects on Purkinje cells. The paper concludes by considering the consequences of this new interpretation of cerebellar cortical circuitry for current theories of cerebellar function.