Gamma oscillations (30-150 Hz) in neuronal networks are associated with the processing and recall of information. We measured local field potentials in the dentate gyrus of freely moving mice and found that gamma activity occurs in bursts, which are highly heterogeneous in their spatial extensions, ranging from focal to global coherent events. Synaptic communication among perisomatic-inhibitory interneurons (PIIs) is thought to play an important role in the generation of hippocampal gamma patterns. However, how neuronal circuits can generate synchronous oscillations at different spatial scales is unknown. We analyzed paired recordings in dentate gyrus slices and show that synaptic signaling at interneuron-interneuron synapses is distance dependent. Synaptic strength declines whereas the duration of inhibitory signals increases with axonal distance among interconnected PIIs. Using neuronal network modeling, we show that distance-dependent inhibition generates multiple highly synchronous focal gamma bursts allowing the network to process complex inputs in parallel in flexibly organized neuronal centers.Perisomatic-inhibitory interneurons (PIIs) contribute to the generation of gamma oscillations in the hippocampus. Here the authors demonstrate distance-dependent inhibition between PIIs in freely moving mice, and use computational analysis to show that distance-dependent inhibition supports the emergence of focal gamma bursts.