Intracellular recordings of cortical neurons in awake cat and monkey show a depolarized state, sustained firing, and intense subthreshold synaptic activity. It is not known what conductance dynamics underlie such activity and how neurons process information in such highly stochastic states. Here, we combine intracellular recordings in awake and naturally sleeping cats with computational models to investigate subthreshold dynamics of conductances and how conductance dynamics determine spiking activity. We show that during both wakefulness and the "up-states" of natural slow-wave sleep, membrane-potential activity stems from a diversity of combinations of excitatory and inhibitory synaptic conductances, with dominant inhibition in most of the cases. Inhibition also provides the largest contribution to membrane potential fluctuations. Computational models predict that in such inhibition-dominant states, spikes are preferentially evoked by a drop of inhibitory conductance, and that its signature is a transient drop of membrane conductance before the spike. This pattern of conductance change is indeed observed in estimates of spike-triggered averages of synaptic conductances during wakefulness and slow-wave sleep up states. These results show that activated states are defined by diverse combinations of excitatory and inhibitory conductances with pronounced inhibition, and that the dynamics of inhibition is particularly effective on spiking, suggesting an important role for inhibitory processes in both conscious and unconscious cortical states.