GABA (gamma-aminobutyric acid) is predominantly released by local interneurons in the cerebral cortex to particular subcellular domains of the target cells. This suggests that compartmentalized, synapse-specific action of GABA is required in cortical networks for phasic inhibition. However, GABA released at the synaptic cleft diffuses to receptors outside the postsynaptic density and thus tonically activates extrasynaptic GABA(A) and GABA(B) receptors, which include subtypes of both receptor families especially sensitive to low concentrations of GABA. The synaptic and extrasynaptic action of GABA corroborates the idea that neurons of the brain use synaptic (or wiring) transmission and non-synaptic (or volume) transmission for communication. However, re-uptake mechanisms restrict the spatial extent of extrasynaptic GABA-mediated effects, and it has been proposed that the concerted action of several presynaptic interneurons, the sustained firing of individual cells or an increase in release-site density is required to reach ambient GABA levels sufficient to activate extrasynaptic receptors. Here we show that individual neurogliaform cells release enough GABA for volume transmission within the axonal cloud and, thus, that neurogliaform cells do not require synapses to produce inhibitory responses in the overwhelming majority of nearby neurons. Neurogliaform cells suppress connections between other neurons acting on presynaptic terminals that do not receive synapses at all in the cerebral cortex. They also reach extrasynaptic, delta-subunit-containing GABA(A) (GABA(Adelta)) receptors responsible for tonic inhibition. We show that GABA(Adelta) receptors are localized to neurogliaform cells preferentially among cortical interneurons. Neurosteroids, which are modulators of GABA(Adelta) receptors, alter unitary GABA-mediated effects between neurogliaform cells. In contrast to the specifically placed synapses formed by other interneurons, the output of neurosteroid-sensitive neurogliaform cells represents the ultimate form of the lack of spatial specificity in GABA-mediated systems, leading to long-lasting network hyperpolarization combined with widespread suppression of communication in the local circuit.