The piriform cortex (PC), like other cortical regions, normally operates in a state of dynamic equilibrium between excitation and inhibition. Here we examined the roles played by pre- and postsynaptic GABABreceptors in maintaining this equilibrium in the PC. Using whole-cell recordings in brain slices from the anterior PC of mice, we found that synaptic activation of postsynaptic GABABreceptors hyperpolarized the two major classes of layer 2 principal neurons and reduced the intrinsic electrical excitability of these neurons. Presynaptic GABABreceptors are expressed on the terminals of associational (intracortical) glutamatergic axons in the PC. Heterosynaptic activation of these receptors reduced excitatory associational inputs onto principal cells. Presynaptic GABABreceptors are also expressed on the axons of GABAergic interneurons in the PC, and blockade of these autoreceptors enhanced inhibitory inputs onto principal cells. Hence, presynaptic GABABautoreceptors produce disinhibition of principal cells. To study the functional consequences of GABABactivationin vivo, we used 2-photon calcium imaging to simultaneously monitor the activity of ~200 layer 2 neurons. Superfusion of the GABABagonist baclofen reduced spontaneous random firing but also promoted synchronous epileptiform activity. These findings suggest that, while GABABactivation can dampen excitability by engaging pre- and postsynaptic GABABheteroreceptors on glutamatergic neurons, it can also promote excitability by disinhibiting principal cells by activating presynaptic GABABautoreceptors on interneurons. Thus, depending on the dynamic balance of hetero- and autoinhibition, GABABreceptors can function as variable modulators of circuit excitability in the PC.