Adult neurogenesis, the birth and integration of new neurons from adult neural stem cells, is a striking form of structural plasticity and highlights the regenerative capacity of the adult mammalian brain. Accumulating evidence suggests that neuronal activity regulates adult neurogenesis and that new neurons contribute to specific brain functions. The mechanism that regulates the integration of newly generated neurons into the pre-existing functional circuitry in the adult brain is unknown. Here we show that newborn granule cells in the dentate gyrus of the adult hippocampus are tonically activated by ambient GABA (gamma-aminobutyric acid) before being sequentially innervated by GABA- and glutamate-mediated synaptic inputs. GABA, the major inhibitory neurotransmitter in the adult brain, initially exerts an excitatory action on newborn neurons owing to their high cytoplasmic chloride ion content. Conversion of GABA-induced depolarization (excitation) into hyperpolarization (inhibition) in newborn neurons leads to marked defects in their synapse formation and dendritic development in vivo. Our study identifies an essential role for GABA in the synaptic integration of newly generated neurons in the adult brain, and suggests an unexpected mechanism for activity-dependent regulation of adult neurogenesis, in which newborn neurons may sense neuronal network activity through tonic and phasic GABA activation.