In addition to synaptic inhibition, GABA(A) receptors can mediate a "tonic" form of signaling that is not time-locked to presynaptic action potentials, and which is mediated by specific extrasynaptic GABA(A) receptor subtypes. As a result, it is sensitive to certain modulators, such as endogenous neurosteroids, which undergo changes related to hormonal status and stress. Here I review the mechanisms by which tonic currents regulate neuronal and network excitability. We have measured tonic currents in the hippocampi from healthy and epileptic rats following status epilepticus or traumatic brain injury, and determined the neuronal and network effects of modulating these tonic currents. Importantly, tonic currents show cell type specificity; for example, in the hippocampus, they are larger in interneurons than in pyramidal cells. Tonic currents are preserved or increased in models of focal epilepsy, even in the face of a profound loss of synaptic inhibition. This may represent a compensatory change that prevents seizure generation. In contrast to synaptic currents, tonic currents in the hippocampus markedly change the offset of the neuronal input-output function without affecting neuronal gain. The compensation of decreased synaptic inhibition by tonic inhibition may lead to networks composed of neurons with higher gain. This along with the inability of tonic currents to respond rapidly to increases in network activity, can lead to compensated networks that rapidly decompensate in the face of an increasing input. Cell type specificity further complicates the network effects, so that increasing tonic currents can decrease synaptic inhibition onto pyramidal cells (through inhibiting interneurons) or can promote spike-wave discharges through thalamocortical hyperpolarization.