Proper wiring of neural circuits during development depends on both molecular cues that guide connectivity and activity-dependent mechanisms that use patterned activation to adjust the strength and number of synaptic connections. In this chapter, we discuss some of the plasticity mechanisms underlying the experience-dependent rewiring of visual cortical microcircuits focusing on layer 4 of rat primary visual cortex. The microcircuit in layer 4 has the ability to regulate its excitability by shifting the balance between excitatory and inhibitory synaptic transmission in an experience-dependent manner. Early in postnatal development (shortly after eye opening), visual deprivation activates several forms of homeostatic plasticity that cooperate to adjust layer 4 excitability to compensate for reduced sensory drive. In contrast, during the classical sensitive period for rodent visual system plasticity, this homeostatic response is replaced by mechanisms that reduce the responsiveness of deprived cortex. We discuss this developmentally regulated switch in plasticity within layer 4 and how this might depend on the maturation of excitatory and inhibitory monosynaptic connections. Based on our published data, we propose inhibitory plasticity as an important player in circuit refinement that can contribute both to the compensatory forms of circuit plasticity in the early stages of development and to the pathological loss of function induced by visual deprivation during the critical period.