Opiate drugs alter cognitive performance and influence hippocampal excitability, including long-term potentiation (LTP) and seizure activity. The dentate gyrus (DG) contains two major opioid peptides, enkephalins and dynorphins, which have opposing effects on excitability. Enkephalins preferentially bind to delta- and mu-opioid receptors (DORs and MORs) while dynorphins preferentially bind to kappa-opioid receptors (KORs). Opioid receptors can also be activated by exogenous opiate drugs such as the MOR agonist morphine. Enkephalins are contained in the mossy fiber pathway, in the lateral perforant path (PP) and in scattered GABAergic interneurons. MORs and DORs are predominantly in distinct subpopulations of GABAergic interneurons known to inhibit granule cells, and are present at low levels within granule cells. MOR and DOR agonists increase excitability and facilitate LTP in the molecular layer. Anatomical and physiological evidence is consistent with somatodendritic and axon terminal targeting of both MORs and DORs. Dynorphins are in the granule cells, most abundantly in mossy fibers but also in dendrites. KORs have been localized to granule cell mossy fibers, supramammillary afferents to granule cells, and PP terminals. KOR agonists, including endogenous dynorphins, diminish the induction of LTP. Recent evidence indicates that opiates and opioids also modulate other processes in the hippocampal formation, including adult neurogenesis, the actions of gonadal hormones, and development of neonatal transmitter systems.