It is widely believed that nootropic (cognition-enhancing) agents produce their therapeutic effects by augmenting excitatory synaptic transmission in cortical circuits, primarily through positive modulation of alpha-amino-3-hydroxy-5-methyl-4-isoxazole-propionate receptors (AMPARs). However, GABA-mediated inhibition is also critical for cognition, and enhanced GABA function may be likewise therapeutic for cognitive disorders. Could nootropics act through such a mechanism as well? To address this question, we examined the effects of nootropic agents on excitatory and inhibitory postsynaptic currents (EPSCs and IPSCs) recorded from layer V pyramidal cells in acute slices of somatosensory cortex. Aniracetam, a positive modulator of AMPA/kainate receptors, increased the peak amplitude of evoked EPSCs and the amplitude and duration of polysynaptic fast IPSCs, manifested as a greater total charge carried by IPSCs. As a result, the EPSC/IPSC ratio of total charge was decreased, representing a shift in the excitation-inhibition balance that favors inhibition. Aniracetam did not affect the magnitude of either monosynaptic IPSCs (mono-IPSCs) recorded in the presence of excitatory amino acid receptor antagonists, or miniature IPSCs (mIPSCs) recorded in the presence of tetrodotoxin. However, the duration of both mono-IPSCs and mIPSCs was prolonged, suggesting that aniracetam also directly modulates GABAergic transmission. Cyclothiazide, a preferential modulator of AMPAR function, enhanced the magnitude and duration of polysynaptic IPSCs, similar to aniracetam, but did not affect mono-IPSCs. Concanavalin A, a kainate receptor modulator, had little effect on EPSCs or IPSCs, suggesting there was no contribution from kainate receptor activity. These findings indicate that AMPAR modulators strengthen inhibition in neocortical pyramidal cells, most likely by altering the kinetics of AMPARs on synaptically connected interneurons and possibly by modulating GABA(A) receptor responses in pyramidal cells. This suggests that the therapeutic actions of nootropic agents may be partly mediated through enhanced cortical GABAergic inhibition, and not solely through the direct modification of excitation, as previously thought.