Coincident pre- and postsynaptic activity generates long-term potentiation (LTP), a possible cellular model of learning and memory. LTP has two components: (1) an increase in the excitatory postsynaptic potential (EPSP), and (2) an increase in the ability of the EPSP to generate a spike (E-S coupling of LTP). We have used pharmacological and genetic approaches to address the molecular nature of E-S coupling in CA1 pyramidal neurons. Blockade of the Ca2+-sensitive phosphatase, calcineurin, prevents induction of E-S coupling without interfering with LTP of the EPSP. Calcineurin produces its effect on E-S coupling by inducing a long-lasting depression (LTD) of the GABA(A)-mediated inhibitory postsynaptic potentials (IPSPs). This LTD of the IPSP was prevented by blockade of NMDA receptors. Thus, the tetanus that elicits NMDA-dependent LTP mediates a coordinately regulated double function. It produces LTP of the EPSP and, concomitantly, LTD of the IPSP that leads to enhancement of E-S coupling.