Activity flow through the hippocampus is thought to arise exclusively from unidirectional excitatory synaptic signaling from CA3 to CA1 to the subiculum. Theta rhythms are important for hippocampal synchronization during episodic memory processing; thus, it is assumed that theta rhythms follow these excitatory feedforward circuits. To the contrary, we found that theta rhythms generated in the rat subiculum flowed backward to actively modulate spike timing and local network rhythms in CA1 and CA3. This reversed signaling involved GABAergic mechanisms. However, when hippocampal circuits were physically limited to a lamellar slab, CA3 outputs synchronized CA1 and the subiculum using excitatory mechanisms, as predicted by classic hippocampal models. Finally, analysis of in vivo recordings revealed that this reversed theta flow was most prominent during REM sleep. These data demonstrate that communication between CA3, CA1 and the subiculum is not exclusively unidirectional or excitatory and that reversed inhibitory theta signaling also contributes to intrahippocampal synchrony.