Key points The internal anal sphincter develops tone important for maintaining high anal pressure and continence. Controversy exists regarding the mechanisms underlying tone development. We examined the hypothesis that tone depends upon electrical slow waves (SWs) initiated in intramuscular interstitial cells of Cajal (ICC‐IM) by activation of Ca2+‐activated Cl− channels (ANO1, encoded by Ano1) and voltage‐dependent L‐type Ca2+ channels (CavL, encoded by Cacna1c). Measurement of membrane potential and contraction indicated that ANO1 and CavL have a central role in SW generation, phasic contractions and tone, independent of stretch. ANO1 expression was examined in wildtype and Ano1/+egfp mice with immunohistochemical techniques. Ano1 and Cacna1c expression levels were examined by quantitative PCR in fluorescence‐activated cell sorting. ICC‐IM were the predominant cell type expressing ANO1 and the most likely candidate for SW generation. SWs in ICC‐IM are proposed to conduct to smooth muscle where Ca2+ entry via CavL results in phasic activity that sums to produce tone. Abstract The mechanism underlying tone generation in the internal anal sphincter (IAS) is controversial. We examined the hypothesis that tone depends upon generation of electrical slow waves (SWs) initiated in intramuscular interstitial cells of Cajal (ICC‐IM) by activation of Ca2+‐activated Cl− channels (encoded by Ano1) and voltage‐dependent L‐type Ca2+ channels (encoded by Cacna1c). Phasic contractions and tone in the IAS were nearly abolished by ANO1 and CavL antagonists. ANO1 antagonists also abolished SWs as well as transient depolarizations that persisted after addition of CavL antagonists. Tone development in the IAS did not require stretch of muscles, and the sensitivity of contraction to ANO1 antagonists was the same in stretched versus un‐stretched muscles. ANO1 expression was examined in wildtype and Ano1/+egfp mice with immunohistochemical techniques. Dual labelling revealed that ANO1 expression could be resolved in ICC but not smooth muscle cells (SMCs) in the IAS and rectum. Ano1, Cacna1c and Kit gene expression were the same in extracts of IAS and rectum muscles. In IAS cells isolated with fluorescence‐activated cell sorting, Ano1 expression was 26.5‐fold greater in ICC than in SMCs while Cacna1c expression was only 2‐fold greater in SMCs than in ICC. These data support a central role for ANO1 and CavL in the generation of SWs and tone in the IAS. ICC‐IM are the probable cellular candidate for ANO1 currents and SW generation. We propose that ANO1 and CavL collaborate to generate SWs in ICC‐IM followed by conduction to adjacent SMCs where phasic calcium entry through CavL sums to produce tone.