Insertion of new neurons into adult neural circuits could either promote or impair circuit function, depending on whether homeostatic mechanisms are in place to regulate the resulting changes in neural activity. In the hippocampus (a mammalian forebrain structure important in aspects of memory and mood) several lines of behavioral evidence suggest important adaptive roles for adult-generated neurons, indicating that there could be mechanisms to control the potentially adverse increase in excitation associated with new cells. Here, we delineate behavioral and computational models for the role of circuit homeostasis in enabling neuron insertion to modulate hippocampal function adaptively, and we describe molecular and cellular mechanisms for implementing this circuit-level adaptive regulation of hippocampal activity.