Currently, many millions of people treated for various ailments receive high doses of salicylate. Consequently, understanding the mechanisms by which salicylate induces tinnitus is an important issue for the research community. Behavioral testing in rats have shown that tinnitus induced by salicylate or mefenamate (both cyclooxygenase blockers) are mediated by cochlear NMDA receptors. Here we report that the synapses between the sensory inner hair cells and the dendrites of the cochlear spiral ganglion neurons express NMDA receptors. Patch-clamp recordings and two-photon calcium imaging demonstrated that salicylate and arachidonate (a substrate of cyclooxygenase) enabled the calcium flux and the neural excitatory effects of NMDA on cochlear spiral ganglion neurons. Salicylate also increased the arachidonate content of the whole cochlea in vivo. Single-unit recordings of auditory nerve fibers in adult guinea pig confirmed the neural excitatory effect of salicylate and the blockade of this effect by NMDA antagonist. These results suggest that salicylate inhibits cochlear cyclooxygenase, which increased levels of arachidonate. The increased levels of arachidonate then act on NMDA receptors to enable NMDA responses to glutamate that inner hair cells spontaneously release. This new pharmacological profile of salicylate provides a molecular mechanism for the generation of tinnitus at the periphery of the auditory system.