In mammalian neocortex, the delicate balance of neural circuits is regulated by a rich repertoire of inhibitory control mechanisms mediated by diverse classes of GABAergic interneurons. A key step common to all GABAergic neurons is the synthesis of GABA, catalyzed by 2 isoforms of glutamic acid decarboxylases (GAD). Among these, GAD67 is the rate-limiting enzyme. GAD67 level is regulated by neural activity and is altered in multiple neuropsychiatric disorders. The significance of altered GAD67 levels on inhibitory transmission, however, remains unclear. The presence of GAD65, postsynaptic GABA receptor regulation, and the diversity of cortical interneurons make the link from GAD67 levels to GABA transmission less than straightforward. Here, we selectively removed one allele of the GAD67 gene, Gad1, in PV interneurons in juvenile mice. We found substantial deficits in transmission from PV to pyramidal neurons in prefrontal cortex, along with increases of pyramidal cell excitability and excitation/inhibition balance in PV cells. Synaptic deficits recovered in adult mice, suggesting engagement of homeostatic and compensatory mechanisms. These results demonstrate that GAD67 levels directly influence synaptic inhibition. Thus, GAD67 deficiency in PV cells likely contributes to cortical dysfunction in disease states; the reversibility of synaptic deficits suggests nonpermanent damage to inhibitory circuitry.