The properties of neonatal GABAergic synapses were investigated in neurones of the hippocampal CA3 region. GABA, acting on GABAA receptors, provides most of the excitatory drive on immature CA3 pyramidal neurones at an early stage of development, whereas glutamatergic synapses (in particular, those mediated by AMPA receptors) are mostly quiescent. Thus, during the first postnatal week of life, bicuculline fully blocked spontaneous and evoked depolarising potentials, and GABAA receptor agonists depolarised CA3 pyramidal neurones. GABAA mediated currents also had a reduced sensitivity to benzodiazepines. In the presence of bicuculline, between P0 and P4, increasing the stimulus strength reveals an excitatory postsynaptic potential which is mostly mediated by NMDA receptors. During the same developmental period, pre- (but not post) synaptic GABAB inhibition is present. Intracellular injections of biocytin showed that the axonal network of the GABAergic interneurones is well developed at birth, whereas the pyramidal recurrent collaterals are only beginning to develop. Finally, chronic bicuculline treatment of hippocampal neurones in culture reduced the extent of neuritic arborisation, suggesting that GABA acts as a trophic factor in that period. In conclusion, it is suggested that during the first postnatal week of life, when excitatory inputs are still poorly developed, GABAA receptors provide the excitatory drive necessary for pyramidal cell outgrowth. Starting from the end of the first postnatal week of life, when excitatory inputs are well developed, GABA (acting on both GABAA and GABAB receptors) will hyperpolarise the CA3 pyramidal neurones and, as in the adult, will prevent excessive neuronal discharges. Our electrophysiological and morphological studies have shown that hippocampal GABAergic interneurones are in a unique position to modulate the development of CA3 pyramidal neurones. Developing neurones require a certain degree of membrane depolarisation, and a consequent rise in intracellular calcium, for stimulating neurite outgrowth; the GABAergic network, which develops prior to the glutamatergic one, appears to provide this depolarisation. Starting from the end of the first postnatal week of life, at a time when excitatory pathways are developing, GABA (acting on both GABAA and GABAB receptors) would reverse its action, and start to play its well-known role as an inhibitory neurotransmitter.