Although functional glycinergic synapses have not been identified in the hippocampus, neurons in this area express Cl(-) permeable extrasynaptic glycine receptors (GlyRs). In experiments on CA3 pyramidal neurons on postnatal day 0-6 rat hippocampal slices, we detected robust GlyR activity as a tonic current and as single-channel events. Glycine release was independent of neuronal activity or extracellular Ca(2+). The endogenous GlyR activity was strongly enhanced by inhibition of the glycine-transporter-1 (GlyT1). Blockade of GlyT1 also caused a profound increase in the baseline current induced by exogenous glycine. Inhibition of GlyT1 reduced the frequency of spontaneous network events known as field giant depolarizing potentials (fGDPs) and of the unit activity in the absence of synaptic transmission. This inhibitory action on fGDPs was mimicked by applying 2 μm glycine or 0.1 μm isoguvacine, a GABAA-receptor agonist. Furthermore, 2 μm glycine suppressed unit spiking in the absence of synaptic transmission. Hence, despite the well known depolarizing Cl(-) equilibrium potential of neonatal hippocampal neurons, physiologically relevant extracellular glycine concentrations can exert an inhibitory action. The present data show that, akin to GABA uptake, GlyT1 exerts a powerful modulatory action on network events in the newborn hippocampus.