A high incidence of seizures occurs during the neonatal period when immature networks are hyperexcitable and susceptible to hypersyncrhonous activity. During development, γ-aminobutyric acid (GABA), the primary inhibitory neurotransmitter in adults, typically excites neurons due to high expression of the Na(+)-K(+)-2Cl(-) cotransporter (NKCC1). NKCC1 facilitates seizures because it renders GABA activity excitatory through intracellular Cl(-) accumulation, while blocking NKCC1 with bumetanide suppresses seizures. Bumetanide is currently being tested in clinical trials for treatment of neonatal seizures. By blocking NKCC1 with bumetanide during cortical development, we found a critical period for the development of α-amino-3-hydroxyl-5-methyl-4-isoxazole-propionate synapses. Disruption of GABA signaling during this window resulted in permanent decreases in excitatory synaptic transmission and sensorimotor gating deficits, a common feature in schizophrenia. Our study identifies an essential role for GABA-mediated depolarization in regulating the balance between cortical excitation and inhibition during a critical period and suggests a cautionary approach for using bumetanide in treating neonatal seizures.