Basket and bistratified cells form two anatomically distinct classes of GABAergic local-circuit neurons in the CA1 region of the rat hippocampus. A physiological comparison was made of intracellularly recorded basket (n = 13) and bistratified neurons (n = 6), all of which had been anatomically defined by their efferent target profile (Halasy et al., 1996). Basket cells had an average resting membrane potential of -64.2 +/- 7.2 vs. -69.2 +/- 4.6 mV in bistratified cells. The latter had considerably higher mean input resistances (60.2 +/- 42.1 vs. 31.3 +/- 10.9 M Ohms) and longer membrane time constants (18.6 +/- 8.1 vs. 9.8 +/- 4.5 ms) than basket cells. Differences were also apparent in the duration of action potentials, those of basket cells being 364 +/- 77 and those of bistratified cells being 527 +/- 138 microseconds at half-amplitude. Action potentials were generally followed by prominent, fast after-hyperpolarizing potentials which in basket cells were 13.5 +/- 6.7 mV in amplitude vs. 10.5 +/- 5.1 in bistratified cells. The differences in membrane time constant, resting membrane potential, and action potential duration reached statistical significance (P < 0.05). Extracellular stimulation of Schaffer collateral/commissural afferents elicited short-latency excitatory postsynaptic potentials (EPSPs) in both cell types. The average 10-90% rise time and duration (at half-amplitude) of subthreshold EPSPs in basket cells were 1.9 +/- 0.5 and 10.7 +/- 5.6 ms, compared to 3.3 +/- 1.3 and 20.1 +/- 9.7 ms in bistratified cells, the difference in EPSP rise times being statistically significant. Basket and bistratified EPSPs were highly sensitive to a bath applied antagonist of non-N-methyl-D-aspartate (NMDA) receptors, whereas the remaining slow-rise EPSP could be abolished by an NMDA receptor antagonist. Increasing stimulation intensity elicited biphasic inhibitory postsynaptic potentials (IPSPs) in both basket and bistratified cells. In conclusion, basket and bistratified cells in the CA1 area show prominent differences in several of their membrane and firing properties. Both cell classes are activated by Schaffer collateral/commissural axons in a feedforward manner and receive inhibitory input from other, as yet unidentified, local-circuit neurons.