Inhibiting unwanted thoughts, actions and emotions figures centrally in daily life, and the prefrontal cortex (PFC) is widely viewed as a source of this inhibitory control. We argue that the function of the PFC is best understood in terms of representing and actively maintaining abstract information, such as goals, which produces two types of inhibitory effects on other brain regions. Inhibition of some subcortical regions takes a directed global form, with prefrontal regions providing contextual information relevant to when to inhibit all processing in a region. Inhibition within neocortical (and some subcortical) regions takes an indirect competitive form, with prefrontal regions providing excitation of goal-relevant options. These distinctions are crucial for understanding the mechanisms of inhibition and how they can be impaired or improved.