The physiological function of GABA transporters and GABA receptors in retinal horizontal cells (HCs) under dark-and light-adapted conditions were studied by whole-cell voltage clamp and intracellular recording techniques in retinal slices and whole-mounted isolated retinas of the larval tiger salamander. Puff application of GABA in picrotoxin elicited a NO-711 (a potent GABA transporter blocker)-sensitive inward current that did not exhibit a reversal potential in the physiological range, consistent with the idea that these HCs contain electrogenic GABA transporters. Application of GABA in NO-711 elicited a chloride current in HCs; about half of the current was suppressed by bicuculline or I4AA (a GABA(C) receptor antagonist), and the remaining half was suppressed by bicuculline + I4AA or picrotoxin. In whole-mount retinas, NO-711, bicuculline, I4AA, or picrotoxin hyperpolarized the HCs and enhanced the light responses under dark-adapted conditions, and blocked the time-dependent recovery of HC membrane potential and light responses during background illumination. Based on the parallel conductance model, GABA released in darkness mediates a chloride conductance about three times greater than the leak conductance or the glutamate-gated cation conductance. About half of this chloride conductance is mediated by GABA(A) receptors, and the other half is mediated by GABA(C) receptors. These results suggest that GABA released from HCs through the NO-711-sensitive GABA transporters activates GABA(A) and GABA(C) receptors, resulting in chloride conductance increase which leads to a HC depolarization and reduction of the light response. Additionally, GABA transporters also mediate GABA release in background light that is responsible for the recovery of HC membrane potential and light responses.