Hippocampal area CA2 is emerging as a critical region for memory formation. Excitatory Scaffer collateral (SC) inputs from CA3 do not express activity-dependent plasticity at SC-CA2 synapses, and are governed by a large feed-forward inhibition that prevents them from engaging CA2 pyramidal neurons. However, long-term depression at inhibitory synapses evoked by stimulation of SC inputs highly increases the excitatory/inhibitory balance coming from CA3 and allows the recruitment of CA2 pyramidal neurons. In contrast, distal excitatory inputs in stratum lacunosum moleculare (SLM) can drive action potential firing in CA2 pyramidal neurons and also express a long-term potentiation. However, it is unknown whether stimulation of distal inputs can also evoke plasticity at inhibitory synapses and if so, whether this plasticity can control the strength of excitatory inputs. Here we show that stimulation in SLM evokes a long-term depression at inhibitory synapses. This plasticity strongly increases the excitatory drive of both proximal and distal inputs and allows CA3 to recruit CA2 pyramidal neurons. These data reveal a bi-directional interplay between proximal and distal inputs to CA2 pyramidal neurons that is likely to play an important role in information transfer through the hippocampus.