Glucagon-like peptide-1 (GLP-1) is a hormone that stimulates insulin secretion. Receptors for GLP-1 are also found in the brain, including the hippocampus, the center for memory and learning. Diabetes is a risk factor for decreased memory functions. We studied effects of GLP-1 and exendin-4, a GLP-1 receptor agonist, on γ-aminobutyric acid (GABA) signaling in hippocampal CA3 pyramidal neurons. GABA is the main inhibitory neurotransmitter and decreases neuronal excitability. GLP-1 (0.01–1 nmol/L) transiently enhanced synaptic and tonic currents, and the effects were blocked by exendin (9-39). Ten pmol/L GLP-1 increased both the spontaneous inhibitory postsynaptic current (sIPSC) amplitudes and frequency by a factor of 1.8. In 0.1, 1 nmol/L GLP-1 or 10, 50, or 100 nmol/L exendin-4, only the sIPSC frequency increased. The tonic current was enhanced by 0.01–1 nmol/L GLP-1 and by 0.5–100 nmol/L exendin-4. When action potentials were inhibited by tetrodotoxin (TTX), inhibitory postsynaptic currents decreased and currents were no longer potentiated by GLP-1 or exendin-4. In contrast, although the tonic current decreased in TTX, it was still enhanced by GLP-1 or exendin-4. The results demonstrate GLP-1 receptor regulation of hippocampal function and are consistent with GLP-1 receptor agonists enhancing GABAA signaling by pre- and postsynaptic mechanisms.