Neuropeptide Y-containing interneurons in the dentate hilar area play an important role in inhibiting the activity of hippocampal circuitry. Hilar cells are often among the first lost in hippocampal epilepsy. As many types of neurons are found in the hilus, we used a new transgenic mouse expressing GFP in a subset of neurons that colocalized neuropeptide Y (NPY), somatostatin (SST), and GABA for whole-cell, perforated, and cell-attached recording in 240 neurons. As these neurons have not previously been identifiable in live slices, they have not been the focus of physiological analysis. Hilar NPY neurons showed modest spike frequency adaptation, a large 15.6 ±1.0 mV afterhyperpolarization, a mean input resistance of 335±26 M, and were capable of fast-firing. Muscimol-mediated excitatory actions were found in a nominally Ca2+-free/high-Mg2+ bath solution using cell-attached recording, gramicidin perforated patch recording revealed a GABA reversal potential positive to both the resting membrane potential and spike threshold, and GABAA receptor antagonists inhibited half the recorded neurons and blocked burst firing. Together, these data suggest GABA was excitatory to many NPY cells. NPY and SST consistently hyperpolarized and reduced spike frequency in these neurons. No hyperpolarization of NPY on membrane potential was detected in the presence of tetrodotoxin, AP5, CNQX and bicuculline, supporting an indirect effect. Under similar conditions, SST hyperpolarized the cells, suggesting a direct postsynaptic action. Depolarizing actions of GABA and GABA-dependent burst-firing may synchronize a rapid release of GABA, NPY, and SST, leading to pre- and postsynaptic inhibition of excitatory hippocampal circuits.