Feedforward inhibitory GABAergic transmission is critical for mature cortical circuit function; in the neonate, however, GABA is depolarizing and believed to have a different role. Here we show that the GABAA receptor-mediated conductance is depolarizing in excitatory (stellate) cells in neonatal (postnatal day [P]3-5) layer IV barrel cortex, but GABAergic transmission at this age is not engaged by thalamocortical input in the feedforward circuit and has no detectable circuit function. However, recruitment occurs at P6-7 as a result of coordinated increases in thalamic drive to fast-spiking interneurons, fast-spiking interneuron-stellate cell connectivity and hyperpolarization of the GABAA receptor-mediated response. Thus, GABAergic circuits are not engaged by thalamocortical input in the neonate, but are poised for a remarkably coordinated development of feedforward inhibition at the end of the first postnatal week, which has profound effects on circuit function at this critical time in development.