Glutamate acts on postsynaptic glutamate receptors to mediate excitatory communication between neurons. The discovery that additional presynaptic glutamate receptors can modulate neurotransmitter release has added complexity to the way we view glutamatergic synaptic transmission. Here we review evidence of a physiological role for presynaptic glutamate receptors in neurotransmitter release. We compare the physiological roles of ionotropic and metabotropic glutamate receptors in short- and long-term regulation of synaptic transmission. Furthermore, we discuss the physiological conditions that are necessary for their activation, the source of the glutamate that activates them, their mechanisms of action and their involvement in higher brain function.