Current concepts of hippocampal circuitry assume a large population of excitatory principal neurones whose activity is largely governed by a network of local-circuit GABAergic interneurones. The diversity of hippocampal local-circuit neurones and their synaptic control over principal cell activity was investigated in vitro, in order to define their synaptic connections and functional roles. Single and dual intracellular recordings were made from local-circuit neurones and pyramidal cells in area CA1 of the rat hippocampal slice. Interneurones were tentatively distinguished from pyramidal cells based on their firing as well as their membrane properties. Intracellular labelling of recorded cells with the marker biocytin revealed a diversity of cell types based on differential dendritic and axonal morphology and synaptic connections.The physiological data revealed that all types of interneurone tested evoked inhibitory postsynaptic potentials (IPSPs) in simultaneously recorded pyramidal cells. The IPSPs had fast rise and decay kinetics and the ones tested pharmacologically, were mediated by GABAA receptors. Similarly, individual interneurones were also shown to innervate other local-circuit interneurones in addition to pyramidal cells, the evoked effects being qualitatively similar in both types of postsynaptic targets.The postsynaptic effect and functional role of one type of hippocampal interneurone, the basket cell, was investigated in greater detail. Basket cell-evoked IPSPs were reliable, but showed some frequency-dependent attenuation. Moreover, basket cell IPSPs were found to interact with intrinsic pyramidal cell conductances to elicit rebound depolarisations and facilitate action potential generation.More detailed investigation showed that basket and axo-axonic cells were particularly effective in entraining pyramidal cell firing and sub-threshold membrane potential oscillations. Through these powerfully tuned mechanisms, sub-types of local-circuit interneurone provide a powerful mechanism to synchronise the activity of pyramidal cells.These results demonstrate a remarkable diversity of GABAergic local-circuit neurones in the hippocampal CA1 area and suggest that specific subtypes of cell mediate different functions.