The signature of slow-wave sleep in the electroencephalogram (EEG) is large-amplitude fluctuation of the field potential, which reflects synchronous alternation of activity and silence across cortical neurons. While initiation of the active cortical states during sleep slow oscillation has been intensively studied, the biological mechanisms which drive the network transition from an active state to silence remain poorly understood. In the current study, using a combination of in vivo electrophysiology and thalamocortical network simulation, we explored the impact of intrinsic and synaptic inhibition on state transition during sleep slow oscillation. We found that in normal physiological conditions, synaptic inhibition controls the duration and the synchrony of active state termination. The decline of interneuron-mediated inhibition led to asynchronous downward transition across the cortical network and broke the regular slow oscillation pattern. Furthermore, in both in vivo experiment and computational modelling, we revealed that when the level of synaptic inhibition was reduced significantly, it led to a recovery of synchronized oscillations in the form of seizure-like bursting activity. In this condition, the fast active state termination was mediated by intrinsic hyperpolarizing conductances. Our study highlights the significance of both intrinsic and synaptic inhibition in manipulating sleep slow rhythms.