Serotonin (5-HT) induces a variety of physiological and behavioral effects in crustaceans. However, the mechanisms employed by 5-HT to effect behavorial changes are not fully understood. Among the mechanisms by which these changes might occur are alterations in synaptic drive and efficacy of sensory, interneurons and motor neurons, as well as direct effects on muscles. We investigated these aspects with the use of a defined sensory-motor system, which is entirely contained within a single abdominal segment and consists of a ‘cuticular sensory neurons–segmental ganglia–abdominal superficial flexor motor neurons–muscles’ circuit. Our studies address the role of 5-HT in altering (1) the activity of motor neurons induced by sensory stimulation; (2) the inherent excitability of superficial flexor motor neurons; (3) transmitter release properties of the motor nerve terminal and (4) input resistance of the muscle. Using en passant recordings from the motor nerve, with and without sensory stimulation, and intracellular recordings from the muscle, we show that 5-HT enhances sensory drive and output from the ventral nerve cord resulting in an increase in the firing frequency of the motor neurons. Also, 5-HT increases transmitter release at the neuromuscular junction, and alters input resistance of the muscle fibers.