An electrode system for recording neural signals suitable for chronic implantation employing shielding and other techniques to improve signal-to-noise ratio. Three electrically isolated electrodes are used in a tripolar fashion. The electrodes are thin wires which are coated with a conductive gel. Each electrode is wrapped around the nerve trunk and held in place by a dielectric encapsulant. A shielding flap is wrapped about the assembly. The electrodes are coupled to conductors that travel through a shielded tube to the sensing electronics. The shield of the tube is electrically coupled to the shielding flap.