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Anatomical, electrophysiological and molecular diversity of basket cell-like interneurons in layers II–IV of rat somatosensory cortex were studied using patch-clamp electrodes filled with biocytin. This multiparametric study shows that neocortical basket cells (BCs) are composed of three distinct subclasses: classical large (LBC) and small (SBC) basket cells and a third subclass, the nest basket cell (NBC). Anatomically, NBCs were distinct from LBCs and SBCs in that they formed simpler dendritic arbors and an axonal plexus of inter-mediate density, composed of a few long, smooth axonal branches. Electrophysiologically, NBCs exhibited diverse discharge responses to depolarizing current injections including accommodation, non-accommodation and stuttering. Single-cell multiplex RT-PCR revealed distinct mRNA expression patterns for the calcium binding proteins parvalbumin (PV), calbindin (CB) and calretinin (CR), and the neuropeptides somatostatin (SOM), vasoactive intestinal peptide (VIP), cholecystokinin (CCK) and neuropeptide Y (NPY) for each BC-subclass. SBCs lacked NPY expression but invariably expressed VIP, whereas neither VIP, CR nor SOM expression was detected in LBCs, and VIP and CR expression was absent in NBCs. Electro-physiologically distinct types of NBCs formed GABAergic synapses with specific dynamics onto pyramidal cells (PCs) and received either strongly facilitating or depressing synaptic inputs from PCs. Finally, NBCs were found to be the most common basket cell in layers II/III, while LBCs were the most common in layer IV. These data provide multiparametric distinguishing features of three major subclasses of basket cells and indicate that NBCs are powerful interneurons that provide most of the (peri-)somatic inhibition in the supragranular layers.