Because granule cells in the dentate gyrus provide a major synaptic input to pyramidal neurons in the CA3 region of the hippocampus, spike generation by granule cells is likely to have a significant role in hippocampal information processing. Granule cells normally fire in a single-spike mode even when inhibition is blocked and provide single-spike output to CA3 when afferent activity converging into the entorhinal cortex from neocortex, brainstem, and other limbic regions increases. The effects of enhancement of N-methyl-D-aspartate (NMDA) receptor-dependent excitatory synaptic transmission and reduction in gamma-aminobutyric acid-A (GABA(A)) receptor-dependent inhibition on spike generation were examined in granule cells of the dentate gyrus. In contrast to the single-spike mode observed in normal bathing conditions, perforant path stimulation in Mg(2+)-free bathing conditions evoked graded burst discharges in granule cells which increased in duration, amplitude, and number of spikes as a function of stimulus intensity. After burst discharges were evoked during transient exposure to bathing conditions that relieve the Mg(2+) block of the NMDA receptor, there was a marked increase in the NMDA receptor-dependent component of the EPSP, but no significant increase in the non-NMDA receptor-dependent component of the EPSP in normal bathing medium. Supramaximal perforant path stimulation still evoked only a single spike, but granule cell spike generation was immediately converted from a single-spike firing mode to a graded burst discharge mode when inhibition was then reduced. The induction of graded burst discharges in Mg(2+)-free conditions and the expression of burst discharges evoked in normal bathing medium with subsequent disinhibition were both blocked by DL-2-amino-4-phosphonovaleric acid (APV) and were therefore NMDA receptor dependent, in contrast to long-term potentiation (LTP) in the perforant path, which is induced by NMDA receptors and is also expressed by alpha-amino-3-hydroxy-5-methyl-4-isoxazoleproprionate (AMPA) receptors. The graded burst discharge mode was also observed in granule cells when inhibition was reduced after a single epileptic afterdischarge, which enhances the NMDA receptor-dependent component of evoked synaptic response, and in the dentate gyrus reorganized by mossy fiber sprouting in kindled and kainic acid-treated rats. NMDA receptor-dependent plasticity of granule cell spike generation, which can be distinguished from LTP and induces long-term susceptibility to epileptic burst discharge under conditions of reduced inhibition, could modify information processing in the hippocampus and promote epileptic synchronization by increasing excitatory input into CA3.