The effects of ammonium acetate or chloride, perfused through the lateral ventricle, were studied on the hippocampal formation of the rat. During perfusion with ammonia, the population spikes, evoked by stimuli delivered to the fimbria, were first increased and then reduced. On the other hand, the late positive wave gradually decreased throughout the application of ammonia. The inhibition, studied by the paired-pulse test, was found to be reduced when the population spike was transiently enhanced, indicating that disinhibition could be responsible for the enhancement of synaptically evoked responses. Neither antidromically evoked population spikes nor the typical effects of iontophoretically applied glutamate, aspartate or γ-aminobutyrate were changed by ammonia. These findings can be accounted for by a single action of ammonia, a depression of excitatory synaptic transmission, the excitatory synapses on inhibitory interneurons being more readily depressed than those on the pyramidal cells. Both effects, early hyperexcitability and late depression, are probably due to a reduction in the release of the excitatory neurotransmitter, glutamate and/or aspartate. We tentatively suggest that these mechanisms are responsible for some of the symptoms observed during the development of hyperammonemic encephalopathies.