Mossy fibers are the sole excitatory projection from dentate gyrus granule cells to the hippocampus, where they release glutamate, dynorphin, and zinc. In addition, mossy fiber terminals show intense immunoreactivity for the inhibitory neurotransmitter GABA. Fast inhibitory transmission at mossy fiber synapses, however, has not previously been reported. Here, we show that electrical or chemical stimuli that recruit dentate granule cells elicit monosynaptic GABA(A) receptor-mediated synaptic signals in CA3 pyramidal neurons. These inhibitory signals satisfy the criteria that distinguish mossy fiber-CA3 synapses: high sensitivity to metabotropic glutamate receptor agonists, facilitation during repetitive stimulation, and NMDA receptor-independent long-term potentiation. GABAergic transmission from the dentate gyrus to CA3 has major implications not only for information flow into the hippocampus but also for developmental and pathological processes involving the hippocampus.