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Significance : Cortically implanted microelectrode arrays provide a direct interface with neuronal populations and are used to restore movement capabilities and provide sensory feedback to patients with paralysis or amputation. Penetrating electrodes experience high rates of signal degradation within the first year that limit effectiveness and lead to eventual device failure. Aim : To assess vascular and neuronal changes over time in mice with implanted electrodes and examine the contribution of the brain tissue response to electrode performance. Approach : We used a multimodal approach combining in vivo electrophysiology and subcellular-level optical imaging. Results : At acute timescales, we observed structural damage from the mechanical trauma of electrode insertion, evidenced by severed dendrites in the electrode path and local hypofluorescence. Superficial vessel growth and remodeling occurred within the first few weeks in both electrode-implanted and window-only animals, but the deeper capillary growth evident in window-only animals was suppressed in electrode-implanted animals. After longer implantation periods, there was evidence of degeneration of transected dendrites superficial to the electrode path and localized neuronal cell body loss, along with deep vascular velocity changes near the electrode. Total spike rate (SR) across all animals reached a peak between 3 and 9 months postimplantation, then decreased. The local field potential signal remained relatively constant for up to 6 months, particularly in the high-gamma band, indicating long-term electrode viability and neuronal functioning at further distances from the electrode, but it showed a reduction in some animals at later time points. Most importantly, we found that progressive high-gamma and SR reductions both correlate positively with localized cell loss and decreasing capillary density within 100 μm of the electrode. Conclusions : This multifaceted approach provided a more comprehensive picture of the ongoing biological response at the brain–electrode interface than can be achieved with postmortem histology alone and established a real-time relationship between electrophysiology and tissue damage.