Of the eight metabotropic glutamate (mGlu) receptor subtypes, only mGlu7 is expressed presynaptically at the Schaffer collateral (SC)-CA1 synapse in the hippocampus in adult animals. Coupled with the inhibitory effects of Group III mGlu receptor agonists on transmission at this synapse, mGlu7 is thought to be the predominant autoreceptor responsible for regulating glutamate release at SC terminals. However, the lack of mGlu7-selective pharmacological tools has hampered direct testing of this hypothesis. We used a novel, selective mGlu7-negative allosteric modulator (NAM), ADX71743, and a newly described Group III mGlu receptor agonist, LSP4-2022, to elucidate the role of mGlu7 in modulating transmission in hippocampal area CA1 in adult C57BL/6J male mice. Interestingly, although mGlu7 agonists inhibit SC-CA1 EPSPs, we found no evidence for activation of mGlu7 by stimulation of SC-CA1 afferents. However, LSP4-2022 also reduced evoked monosynaptic IPSCs in CA1 pyramidal cells and, in contrast to its effect on SC-CA1 EPSPs, ADX71743 reversed the ability of high-frequency stimulation of SC afferents to reduce IPSC amplitudes. Furthermore, blockade of mGlu7 prevented induction of LTP at the SC-CA1 synapse and activation of mGlu7 potentiated submaximal LTP. Together, these data suggest that mGlu7 serves as a heteroreceptor at inhibitory synapses in area CA1 and that the predominant effect of activation of mGlu7 by stimulation of glutamatergic afferents is disinhibition, rather than reduced excitatory transmission. Furthermore, this mGlu7-mediated disinhibition is required for induction of LTP at the SC-CA1 synapse, suggesting that mGlu7 could serve as a novel therapeutic target for treatment of cognitive disorders.