Damage to the peripheral vestibular system results in a syndrome of ocular motor and postural abnormalities that partially and gradually abate over time in a process known as 'vestibular compensation'. The first, rapid, phase of compensation has been associated with a recovery of spontaneous resting activity in the ipsilateral vestibular nucleus complex (VNC), as a consequence of neuronal and synaptic plasticity. Increasing evidence suggests that normal VNC neurons in labyrinthine-intact animals, as well as ipsilateral VNC neurons following unilateral vestibular deafferentation (UVD), rely to some extent on intrinsic pacemaker activity provided by voltage-dependent conductances for their resting activity. Modification of this intrinsic pacemaker activity may underlie the recovery of resting activity that occurs in ipsilateral VNC neurons following UVD. This review summarizes and critically evaluates the 'intrinsic mechanism hypothesis', identifying discrepancies amongst the current evidence and suggesting experiments that may test it further.