Resting state functional connectivity MRI measures synchronous activity among brain regions although the mechanisms governing the temporally coherent BOLD signals remain unclear. Recent studies suggest that γ-amino butyric acid (GABA) levels are correlated with functional connectivity. To understand whether changes in GABA transmission alter functional connectivity, we modulated the GABAergic activity by a GABAA receptor antagonist, bicuculline. Resting and evoked electrophysiology and BOLD signals were measured in isoflurane-anesthetized rats under infusion of low-dose bicuculline or vehicle individually. Both somatosensory BOLD activations and evoked potentials induced by forepaw stimulation were increased significantly under bicuculline compared to vehicle, indicating increased excitability. Gradually elevated resting BOLD correlation within and between the somatosensory and visual cortices, as well as between somatosensory and caudate putamen but not within subcortical areas were found with the infusion of bicuculline. Increased cerebral blood flow was observed throughout the cortical and subcortical areas where the receptor density is high, but it didn’t correlate with BOLD connectivity except in the primary somatosensory cortex. Furthermore, resting EEG coherence in the alpha and beta bands exhibited consistent change with the BOLD correlation. The increased cortico-cortical and cortico-striatal connectivity without dependence on the receptor distribution indicate that the functional connectivity may be mediated by long-range projection via the cortical and striatal GABAergic inter-neurons. Our results indicate an important role of the GABAergic system on neural and hemodynamic oscillations, which further supports the neuronal basis of functional connectivity MRI and its correlation with neurotransmission.