Long-term potentiation of synpatic transmission (LTP) of the perforant path--dentate gyrus synapse is induced by 5 Hz, theta-like stimulation patterns. Such stimuli induce plasticity that is most likely driven by a decrease in synaptic inhibition (disinhibition) mediated by GABAB autoreceptors. In the present study, we demonstrate that LTP induced in this manner is completely antagonized by ethanol. In order to determine the site of ethanol inhibition of LTP induced by theta-like stimulation, we combined slice patch recordings with pharmacologic isolation of the individual glutamatergic and GABAergic synaptic currents. The present experiments revealed that ethanol inhibited NMDA receptor-mediated synaptic currents without potentiation of GABAA currents or attenuation of GABAB-mediated fading of GABAA synaptic currents. These observations with ethanol contrasted with the actions of the water-soluble benzodiazepine midazolam, which strongly potentiated GABAA synaptic currents, reversed the effect of GABAB- mediated fading of GABAA synaptic currents, and therefore blocked the resulting NMDA synaptic currents. These data indicate that the effects of ethanol on long-term changes in synaptic strength in the rat hippocampal formation are due primarily to an action at the NMDA receptor-channel complex.