Ligands for the epidermal growth factor receptor ErbB1, such as epidermal growth factor (EGF) and transforming growth factor alpha (TGFalpha), negatively regulate synaptic maturation of GABAergic neurons in the developing neocortex. Here, we evaluated the effects of these ligands in vivo on developing inhibitory neurons in the dentate gyrus. Hippocampal slices were prepared from postnatal mice repeatedly challenged with EGF or from transgenic mice overexpressing TGFalpha. We monitored paired pulse depression of field population spikes evoked by perforant path stimulation to estimate the strength of local inhibition. Administration of EGF increased the paired pulse ratio, suggesting a reduction of inhibitory strength. A similar reduction was observed in TGFalpha transgenic mice. Monitoring miniature and evoked synaptic currents, we estimated EGF effects on synaptic input and output of GABAergic neurons. EGF treatment diminished the amplitude of excitatory postsynaptic currents (EPSCs) in the GABAergic neurons without affecting their miniature EPSCs. EGF also affected output strength of the GABAergic neurons: The frequency of miniature inhibitory postsynaptic currents (IPSCs) and the evoked IPSC/evoked EPSC ratio were decreased in granule cells. In parallel, EGF down-regulated the protein level of vesicular GABA transporter. Thus, ErbB1 ligands influence GABAergic inhibitory synaptic transmission in the developing dentate gyrus.