Layer 1 of the developing rodent somatosensory cortex contains a dense, transient GABAergic fiber plexus. Axons arising from the zona incerta (ZI) of the ventral thalamus contribute to this plexus, as do axons of intrinsic GABAergic cells of layer 1. The function of this early-appearing fiber plexus is not known, but these fibers are positioned to contact the apical dendrites of most postmigratory neurons. Here we show that electrical stimulation of layer 1 results in a GABA(A)-mediated postsynaptic current (PSC) in pyramidal neurons. Gramicidin perforated patch recording demonstrates that the GABAergic layer 1 synapse is excitatory and can trigger action potentials in cortical neurons. In contrast to electrical stimulation, activation of intrinsic layer 1 neurons with a glutamate agonist fails to produce PSCs in pyramidal cells. In addition, responses can be evoked by stimulation of layer 1 at relatively large distances from the recording site. These findings are consistent with a contribution of the widely projecting incertocortical pathway, the only described GABAergic projection to neonatal cortex. Recording of identified neonatal incertocortical neurons reveals a population of active cells that exhibit high frequencies of spontaneous action potentials and are capable of robustly activating neonatal cortical neurons. Because the fiber plexus is confined to layer 1, this pathway provides a spatially restricted excitatory GABAergic innervation of the distal apical dendrites of pyramidal neurons during the peak period of cortical synaptogenesis.