Intracellular recordings in guinea pig hippocampal slices were used to study the effects of serotonin (5-HT) on presumed inhibitory hilar neurons and on postsynaptic inhibition of granule cells. 5-HT applied by the bath hyperpolarized only 50% of the hilar neurons tested but all CA3 neurons and granule cells, presumably by activating a K-conductance. The bath application of 4-aminopyridine (4-AP, 50 microM) induced burst discharge activity in hilar neurons and giant inhibitory postsynaptic potentials (IPSPs) in granule cells consisting of a Cl- and K-component. 5-HT (5-10 microM) reversibly blocked the K-component of giant IPSPs in granule cells, but not their Cl-component. In the majority of hilar neurons 5-HT increased the frequency of 4-AP induced burst discharges even when hilar neurons were hyperpolarized. Only in a few hilar neurons 5-HT blocked 4-AP induced burst discharges. We conclude that the changes in burst discharge pattern of hilar neurons correspond with the differential effect of 5-HT on Cl- and K-mediated inhibition of granule cells.