The neurotrophin hypothesis proposes that neurotrophins participate in activity-induced modification of synaptic transmission. Increasingly, evidence indicates that the synthesis, secretion and actions of neurotrophins on synaptic transmission are regulated by electrical activity and that neurotrophins themselves can acutely modify synaptic efficacy. Neurotrophins appear to exert either a permissive or instructive role on activity-dependent synaptic potentiation and depression, which depends on the particular synaptic connections and developmental stages. The characteristics of synaptic changes that are induced by neurotrophins suggest that this family of proteins is crucial for providing a molecular background in which activity-dependent plasticity can occur at selective synaptic sites within the neural network.