Adult neurogenesis, a developmental process encompassing the birth of new neurons from adult neural stem cells and their integration into the existing neuronal circuitry, highlights the plasticity and regenerative capacity of the adult mammalian brain. Substantial evidence suggests essential roles of newborn neurons in specific brain functions; yet it remains unclear how these new neurons make their unique contribution. Recently, a series of studies have delineated the basic steps of the adult neurogenesis process and shown that many of the distinct steps are dynamically regulated by the activity of the existing circuitry. Here we review recent findings on the synaptic integration and plasticity of newborn neurons in the adult hippocampus, including the basic biological process, unique characteristics, critical periods, and activity-dependent regulation by the neurotransmitters GABA and glutamate. We propose that adult neurogenesis represents not merely a replacement mechanism for lost neurons, but also an ongoing developmental process in the adult brain that offers an expanded capacity for plasticity for shaping the existing circuitry in response to experience throughout life.