Clinically most active anxiolytic drugs are positive allosteric modulators (PAMs) of GABA(A) receptors, represented by benzodiazepine compounds. Due to their non-selective profile, however, they potently modulate several sup-type specific GABA(A) receptors, contributing to their broad-range side effects. Based on observations in genetically altered mice, however, it has been proposed that anxiolytic action of benzodiazepines is predominantly mediated by GABA(A) alpha2/3 subunit-containing receptors. In the present study we analyzed the actions of the preferential GABA(A) alpha1 and alpha2/3 PAMs, zolpidem and L-838417, respectively on hippocampal EEG and medial septum neuronal activity in anesthetized rats. In parallel, a computational model was constructed to model pharmacological actions of these compounds on the septo-hippocampal circuitry. The present results demonstrated that zolpidem inhibited theta oscillation both in the hippocampus and septum, and profoundly inhibited firing activity of septal neurons. L-838417 also inhibited hippocampal and septal theta oscillation, however, it did not significantly alter firing rate activity of septal neurons. Our computational model showed that cessation of periodic firing of hippocampo-septal neurons, representing absence of hippocampal theta activity, disrupted oscillation of septal units, without altering their overall firing activity, similar to changes observed in our in vivo experiments following administration of L-838417. Understanding the correlation between changes in septo-hippocampal activity and actions of selective modulators of GABA(A) subtype receptor modulators would further advance design of anxiolytic drugs.