Stimulation of the contralateral hippocampus in the hilar region had a marked effect on granule cell excitability in the fascia dentata. The primary effect was to block the population spike that otherwise occurred in response to perforant path stimulation. In contrast, the size the excitatory post-synaptic potential component of the perforant path-evoked field potential was only slightly reduced. The population spike diminution began at short latency (3.5 msec), beginning at about 1.0 msec after the onset of the slow component of the potential evoked by the contralateral stimulus. The completeness and duration of this population spike diminution depended on the contralateral stimulus intensity. The maximum duration was less than 40 msec in unanesthetized rats and more than 100 msec in rats under pentobarbital anaesthesia. Bicuculline did not diminish the field potential evoked by the contralateral stimulus but it did prevent the stimulus from blocking the perforant path population spike and, instead, permitted a weak facilitation of the population spike. The normal reduction of the population spike was not mediated by recurrent inhibition, secondary to granule cell activation, since it occurred whether or not the granule cells were inhibited at the time of contralateral stimulation. These results imply that the initial main effect on fascia dentata granule cells of activity in the contralateral hilus is a gamma-aminobutyric-acid-mediated inhibition. This effect most probably involves commissural excitation of local inhibitory interneurons. The direct excitatory action of commissural fibers on granule cells, by comparison, is very weak.