1. Gramicidin-perforated patch clamp recording was employed to study GABA-mediated responses in rat hypothalamic neurones (n = 102) with an intracellular Cl- concentration unaltered by the pipette solution. 2. In young cultures after 1-7 days in vitro (DIV), GABA induced depolarizing membrane potentials (+16.5 +/- 1.3 mV) that often surpassed the threshold for the firing of action potentials (-42 +/- 1 mV) and resulted in an increase in neuronal activity. The depolarizing responses to GABA in young cultures were dose dependent. The concentration of GABA necessary to evoke the half-maximal depolarization (EC50) was 2.8 microM. In contrast, GABA induced hyperpolarizing membrane potentials (-12.0 +/- 1.4 mV) and a decrease in neuronal activity in older neurones (20-33 DIV). Both the depolarization and the hyperpolarization induced by GABA were blocked by bicuculline, indicating a mediation by GABAA receptors. 3. The reversal potentials of the GABA-evoked currents were between -40 to -50 mV during the first week of culture, and shifted to below -70 mV after 3 weeks of culture. In parallel, neurones that were dissociated from older animals (postnatal day 5) had a more negative reversal potential for the GABA-evoked currents than cells from younger animals (embryonic day 15), suggesting that the negative shift of the reversal potential occurs both in vitro and in vivo. Our data suggest that the mechanism for GABA-induced depolarization is the depolarized Cl- reversal potential found in young but not older neurones. 4. Consistent with the depolarizing response to exogenous application of GABA, some spontaneous depolarizing postsynaptic potentials in young cultures were insensitive to AP5-CNQX, but were eliminated by bicuculline, indicating that synaptically released GABA mediated excitatory synaptic transmission in early development. 5. By combining a rapid computer-controlled delivery of GABA with subthreshold positive current injections into recorded neurones, we found in young cultures that the GABA-evoked depolarization could directly trigger action potentials, facilitate some depolarizing input to fire action potentials, and shunt other depolarizing input. Whether the GABA-induced depolarization is excitatory or inhibitory would be determined by the reversal potential of the GABA-evoked current, and the temporal relationship between GABA-evoked depolarizations and other excitatory events. 6. We conclude that the reversal potential of the GABA-evoked current shifts negatively from depolarizing to hyperpolarizing in developing hypothalamus. Consequently, GABA neurotransmission may serve both excitatory and inhibitory roles during early development.