The hormone leptin has widespread actions in the CNS. Indeed, leptin markedly influences hippocampal excitatory synaptic transmission and synaptic plasticity. However, the effects of leptin on fast inhibitory synaptic transmission in the hippocampus have not been evaluated. Here, we show that leptin modulates GABAA receptor-mediated synaptic transmission onto hippocampal CA1 pyramidal cells. Leptin promotes a rapid and reversible increase in the amplitude of evoked GABAA receptor-mediated inhibitory synaptic currents (IPSCs); an effect that was paralleled by increases in the frequency and amplitude of miniature IPSCs, but with no change in paired pulse ratio or coefficient of variation, suggesting a post-synaptic expression mechanism. Following washout of leptin, a persistent depression (inhibitory long-lasting depression) of evoked IPSCs was observed. Whole-cell dialysis or bath application of inhibitors of phosphoinositide 3 (PI 3)-kinase or Akt prevented leptin-induced enhancement of IPSCs indicating involvement of a post-synaptic PI 3-kinase/Akt-dependent pathway. In contrast, blockade of PI 3-kinase or Akt activity failed to alter the ability of leptin to induce inhibitory long-lasting depression, suggesting that this process is independent of PI 3-kinase/Akt. In conclusion these data indicate that the hormone leptin bi-directionally modulates GABAA receptor-mediated synaptic transmission in the hippocampus. These findings have important implications for the role of this hormone in regulating hippocampal pyramidal neuron excitability.