Transformation of postsynaptic potentials into action potentials is the rate-limiting step of communication in neural networks. The efficiency of this intracellular information transfer also powerfully shapes stimulus representations in sensory cortices. Using whole-cell recordings and information-theoretic measures, we show herein that somatic postsynaptic potentials accurately represent stimulus location on a trial-by-trial basis in single neurons, even 4 synapses away from the sensory periphery in the whisker system. This information is largely lost during action potential generation but can be rapidly (<20 ms) recovered using complementary information in local populations in a cell-type-specific manner. These results show that as sensory information is transferred from one neural locus to another, the circuits reconstruct the stimulus with high fidelity so that sensory representations of single neurons faithfully represent the stimulus in the periphery, but only in their postsynaptic potentials, resulting in lossless information processing for the sense of touch in the primary somatosensory cortex.