To perform computations with the efficiency necessary for animal survival, neocortical microcircuits must be capable of reconfiguring in response to experience, while carefully regulating excitatory and inhibitory connectivity to maintain stable function. This dynamic fine-tuning is accomplished through a rich array of cellular homeostatic plasticity mechanisms that stabilize important cellular and network features such as firing rates, information flow, and sensory tuning properties. Further, these functional network properties can be stabilized by different forms of homeostatic plasticity, including mechanisms that target excitatory or inhibitory synapses, or that regulate intrinsic neuronal excitability. Here we discuss which aspects of neocortical circuit function are under homeostatic control, how this homeostasis is realized on the cellular and molecular levels, and the pathological consequences when circuit homeostasis is impaired. A remaining challenge is to elucidate how these diverse homeostatic mechanisms cooperate within complex circuits to enable them to be both flexible and stable.