The Hodgkin, Huxley, and Katz theories of resting and action potentials are based on the membrane theory, which holds that cell K+ and water exist in the free state. Reviewed here are these theories of cellular potential along with the results of experimental testings. Reviewed also is Ling's association-induction (AI) hypothesis, which holds that all K+ is absorbed selectively and singly on anionic protein sites and that cell water is absorbed in multilayers on extended chains of "matrix proteins." In the development of the AI model, molecular mechanisms of cell permeation and electric potentials were presented according to which the potentials are surface-adsorption phenomena. Thus they resemble those suggested by Baur rather than the membrane potentials proposed by Ostwald and Bernstein. In the present review it is shown that the AI version of the surface adsorption model can account for evidence supporting the Hodgkin, Huxley, Katz approach as well as evidence against it-including extensive recent confirmation of the absorbed state of K+ in muscle.