Recent advances in immunohistochemical techniques have, contrary to earlier reports, positively identified CB1 receptors on glutamatergic terminals in the hippocampus. Further work has implicated these receptors in modulation of susceptibility to kainic acid induced seizures. Based on these results, the current study was designed to test the hypothesis that both exogenous and endogenous cannabinoids can selectively modulate glutamatergic afferents to CA3 pyramidal cells, and that such modulation is mediated by cannabinoid type 1 (CB1) receptors. Towards that end we employed either conventional or two-photon guided minimal stimulation techniques to isolate mossy fiber and/or associational/commissural (A/C) inputs to CA3 pyramidal cells. We report that bath application of WIN55,212-2 selectively inhibits minimally evoked A/C inputs to CA3 pyramidal cells, without significantly altering simultaneously recorded mossy fiber inputs. Further, we find that WIN55,212-2 mediated inhibition of A/C inputs is completely blocked by the CB1 selective antagonist AM-251 and absent in CB1(-/-) animals, suggesting a dependence on CB1 receptors. Finally, we demonstrate that depolarization of CA3 pyramidal cells leads to calcium dependent release of endogenous cannabinoids that transiently inhibit A/C mediated responses, and that this effect is also sensitive to both AM-251 and the muscarinic acetylcholine receptor antagonist atropine. To our knowledge this represents the first demonstration of depolarization induced suppression of excitation in area CA3 of the hippocampus. Collectively, these results provide new information relevant to developing a thorough understanding of how ECs modulate excitatory transmission in an area that is both essential for the acquisition of new memories and intimately involved in epileptogenesis.