The cell adhesion molecule, CHL1, like its close homologue L1, is important for normal brain development and function. In this study, we analysed the functional role of CHL1 in synaptic transmission in the CA1 region of the hippocampus using juvenile CHL1-deficient (CHL1-/-) and wild-type (CHL1+/+) mice. Inhibitory postsynaptic currents evoked in pyramidal cells by minimal stimulation of perisomatically projecting interneurons were increased in CHL1-/- mice compared with wild-type littermates. Also, long-term potentiation (LTP) at CA3-CA1 excitatory synapses was reduced under physiological conditions in CHL1-/- mice. This abnormality was abolished by application of a GABAA receptor antagonist, suggesting that enhanced inhibition is the cause of LTP impairment. Quantitative ultrastructural and immunohistochemical analyses revealed aberrations possibly related to the abnormally high inhibition observed in CHL1-/- mice. The length and linear density of active zones in symmetric synapses on pyramidal cell bodies, as well as number of perisomatic puncta containing inhibitory axonal markers were increased. Density and total number of parvalbumin-positive interneurons was also abnormally high. These observations and the finding that CA1 interneurons express CHL1 protein indicate that CHL1 is important for regulation of inhibitory synaptic transmission and interneuron populations in the postnatal brain. The observed enhancement of inhibitory transmission in CHL1-/- mice is in contrast to the previous finding of reduced inhibition in L1 deficient mice and indicates different functions of these two closely related molecules.