Synaptic activation is associated with rapid changes in intracellular Ca(2+), while the extracellular Ca(2+) level is generally assumed to be constant. Here, using a novel optical method to measure changes in extracellular Ca(2+) at high spatial and temporal resolution, we find that brief trains of synaptic transmission in hippocampal area CA1 induce transient depletion of extracellular Ca(2+). We show that this depletion, which depends on postsynaptic NMDA receptor activation, decreases the Ca(2+) available to enter individual presynaptic boutons of CA3 pyramidal cells. This in turn reduces the probability of consecutive synaptic releases at CA3-CA1 synapses and therefore contributes to short-term paired-pulse depression of minimal responses. This activity-dependent depletion of extracellular Ca(2+) represents a novel form of fast retrograde synaptic signaling that can modulate glutamatergic information transfer in the brain.