The modulation of synaptic transmission by serotonin (5-HT) was studied using whole-cell voltage-clamp and sharp-electrode current-clamp recordings from CA1 pyramidal neurones in transverse rat hippocampal slices in vitro.With GABAA receptors blocked, polysynaptic transmission evoked by stratum radiatum stimulation was inhibited by submicromolar concentrations of 5-HT, while monosynaptic excitatory transmission and CA1 pyramidal neurone excitability were unaffected. The effect persisted following pharmacological blockade of 5-HT1A and 5-HT4 receptors, which directly affect CA1 pyramidal neurone excitability.Concentration-response relationships for 5-HT were determined in individual neurones; the EC50 values for block of polysynaptic excitation and inhibition by 5-HT were ≈230 and ≈160 nm, respectively. The 5-HT receptor type responsible for the observed effect does not fall easily into the present classification of 5-HT receptors.5-HT inhibition of polysynaptic EPSCs persisted following complete block of GABAergic transmission and in CA1 minislices, ruling out indirect effects through interneurones and non-CA1 pyramidal neurones, respectively.Monosynaptic EPSCs evoked by stimulation of CA1 afferent pathways appeared to be unaffected by 5-HT. Monosynaptic EPSCs evoked by stimulation of the alveus, which contains CA1 pyramidal neurone axons, were partially inhibited by 5-HT.We conclude that 5-HT inhibited synaptic transmission by acting at local recurrent collaterals of CA1 pyramidal neurones. This may represent an important physiological action of 5-HT in the hippocampus, since it occurs over a lower concentration range than the 5-HT effects reported so far.