GABA receptor regulation of NMDA-receptor-mediated synaptic responses was studied in area CA1 of the rat hippocampus using extracellular and intracellular recording techniques. Picrotoxin (PTX) was used to suppress GABAA inhibition and 6,7-dinitroquinoxaline-2,3-dione (DNQX) was used to suppress non-NMDA receptor-mediated responses. In this manner, we were able to avoid the complicating factors caused by potentials induced by other excitatory and inhibitory amino acid receptors. Under these conditions, large NMDA-receptor-mediated EPSPs were observed. When paired stimuli were given at interstimulus intervals from 100 to 400 msec, powerful inhibition of the second response was observed. This inhibition was reversed by the GABAB antagonists phaclofen and 2-hydroxy-saclofen; it was also depressed by removal of Mg2+ from the bath. Examination of non-NMDA receptor- mediated synaptic responses (determined in the presence of D-2-amino-5- phosphonovalerate and PTX) showed no such inhibition, thereby supporting the hypothesis that GABAB inhibition of NMDA EPSPs is postsynaptic. This difference in paired-pulse inhibition of NMDA and non-NMDA EPSPs leads us to conclude that there was no evidence of GABAB- mediated presynaptic inhibition of excitatory transmitter release. Intracellular recordings in the presence of DNQX and PTX revealed a phaclofen-sensitive late IPSP that correlated in time with the period of inhibition of NMDA responses. Taken together, these data suggest that paired-pulse-inhibition of NMDA responses is produced by a GABAB- receptor-mediated hyperpolarization of the postsynaptic membrane, causing an enhanced block of the NMDA channels by Mg2+. Regulation of NMDA-mediated synaptic responses by GABAB receptors constitutes a powerful mechanism for control of a major excitatory system in hippocampal pyramidal cells.