Oxytocin (OXT) and vasopressin (VP) are known to be released from dendrites of magnocellular neurons. Here, we show that these peptides reduced evoked EPSCs by a presynaptic mechanism, an effect blocked by peptide antagonists and mimicked by inhibition of endogenous peptidases. Dendritic release of peptides, elicited with depolarization achieved by high frequency stimulation of afferents or with current injection into an individual neuron, induced short-term synaptic depression similar to that seen following exogenous peptide application and was prevented by peptide antagonists. Thus, dendritically released peptides depress evoked EPSCs in magnocellular neurons by activating presynaptic OXT and/or VP receptors. Such a retrograde modulatory action on afferent excitation may serve as a feedback mechanism to permit peptidergic neurosecretory neurons to autoregulate their own activity.