While it is known that ethanol augments GABA-A receptor mediated inhibition in the central nervous system (CNS), demonstrating direct effects of ethanol on GABA transmission has been difficult in brain slices, suggesting that these preparations may lack factors that are required for ethanol's actions. Recent studies indicate that the GABA-enhancing neurosteroid 3alpha-hydroxy-5alpha-pregnan-20-one (3alpha5alphaP) mediates at least some effects of ethanol in the CNS. In the CA1 region of rat hippocampal slices, we found that 60mM ethanol failed to alter paired pulse depression (PDD) of population spikes (PSs) when paired stimuli were delivered to the Schaffer collateral pathway at an interval of 21ms. Following 2-h preincubation of slices with 100nM 3alpha5alphaP, however, ethanol augmented PS PPD. This effect was not observed in the presence of picrotoxin, a GABA-A receptor antagonist, or ADVASEP-7, a beta-cyclodextrin that binds 3alpha5alphaP. These results indicate that 3alpha5alphaP modulates the inhibitory effects of ethanol on hippocampal excitability via GABA-A receptors.