Large circuits of neurons are employed by the brain to encode and process information. How this encoding and processing is carried out is one of the central questions in neuroscience. Since individual neurons communicate with each other through electrical signals (action potentials), the recording of neural activity with arrays of extracellular electrodes is uniquely suited for the investigation of this question. Such recordings provide the combination of the best spatial (individual neurons) and temporal (individual action-potentials) resolutions compared to other large-scale imaging methods. Electrical stimulation of neural activity in turn has two very important applications: it enhances our understanding of neural circuits by allowing active interactions with them, and it is a basis for a large variety of neural prosthetic devices. Until recently, the state-of-the-art in neural activity recording systems consisted of several dozen electrodes with inter-electrode spacing ranging from tens to hundreds of microns. Using silicon microstrip detector expertise acquired in the field of high-energy physics, we created a unique neural activity readout and stimulation framework that consists of high-density electrode arrays, multi-channel custom-designed integrated circuits, a data acquisition system, and data-processing software. Using this framework we developed a number of neural readout and stimulation systems: (1) a 512-electrode system for recording the simultaneous activity of as many as hundreds of neurons, (2) a 61-electrode system for electrical stimulation and readout of neural activity in retinas and brain-tissue slices, and (3) a system with telemetry capabilities for recording neural activity in the intact brain of awake, naturally behaving animals. We will report on these systems, their various applications to the field of neurobiology, and novel scientific results obtained with some of them. We will also outline future directions.