Neuropeptide Y (NPY) is a potent modulator of excitatory synaptic transmission and limbic seizures. NPY is abundantly expressed in the dentate gyrus and is thought to modulate hippocampal excitability via activation of presynaptic Y2 receptors (Y2R). Here we demonstrate that NPY, and commonly used Y2R-preferring (NPY(13-36)) and Y5 receptor (Y5R)-preferring ([D-Trp(32)]NPY and hPP) peptide agonists, evoke similar levels of inhibition at excitatory CA3 synapses in hippocampal slices from wild-type control mice (WT). In contrast, NPYergic inhibition of excitatory CA3 synaptic transmission is absent in mice lacking the Y5R subtype (Y5R KO). In both analyses of evoked population spike activity and spontaneous excitatory postsynaptic synaptic currents (EPSCs), NPY agonists induced powerful inhibitory effects in all hippocampal slices from WT mice, whereas these peptides had no effect in slices from Y5R KO mice. In slices from WT mice, NPY (and NPY receptor-preferring agonists) reduced the frequency of spontaneous EPSCs but had no effect on sEPSC amplitude, rise time, or decay time. Furthermore, NPYergic modulation of spontaneous EPSCs in WT mice was mimicked by bath application of a novel Y5R-selective peptide agonist ([cpp]hPP) but not the selective Y2R agonist ([ahx(5-24)]NPY). In situ hybridization was used to confirm the presence of NPY, Y2, and Y5 mRNA in the hippocampus of WT mice and the absence of Y5R in knockout mice. These results suggest that the Y5 receptor subtype, previously believed to mediate food intake, plays a critical role in modulation of hippocampal excitatory transmission at the hilar-to-CA3 synapse in the mouse.