1. Excitatory synaptic transmission between pairs of monosynaptically coupled pyramidal cells was examined in rat hippocampal slice cultures. Action potentials were elicited in single CA3 pyramidal cells impaled with microelectrodes and unitary excitatory postsynaptic currents (EPSCs) were recorded in whole-cell voltage-clamped CA1 or CA3 cells. 2. The amplitude of successive unitary EPSCs in response to single action potentials varied. The amplitude of EPSCs was altered by adenosine or changes in the [Mg2+]/[CA2+] ratio. We conclude that single action potentials triggered the release of multiple quanta of glutamate. 3. When two action potentials were elicited in the presynaptic cell, the amplitude of the second EPSC was inversely related to the amplitude of the first. Paired-pulse facilitation (PPF) was observed when the first EPSC was small, i.e. the second EPSC was larger than the first, whereas paired-pulse depression (PPD) was observed when the first EPSC was large. 4. The number of trials displaying PPD was greater when release probability was increased, and smaller when release probability was decreased. 5. PPD was not postsynaptically mediated because it was unaffected by decreasing ionic flux with 6-cyano-7-nitroquinoxaline-2,3-dione (CNQX) or receptor desensitization with aniracetam. 6. PPF was maximal at an interstimulus interval of 70 ms and recovered within 500 ms. Recovery from PPD occurred within 5 s. 7. We propose that multiple release sites are formed by the axon of a CA3 pyramidal cell and a single postsynaptic CA1 or CA3 cell. PPF is observed if the first action potential fails to release transmitter at most release sites. PPD is observed if the first action potential successfully triggers release at most release sites. 8. Our observations of PPF are consistent with the residual calcium hypothesis. We conclude that PPD results from a decrease in quantal content, perhaps due to short-term depletion of readily releasable vesicles.