The hippocampal formation contains several local networks with strong synaptic connections. Signal propagation has mostly been studied along a loop linking the entorhinal cortex (EC), dentate gyrus, CA3, CA1, subiculum and again EC. Recent evidence shows, however, a powerful and unique synaptic integration of the CA2 region. We therefore tested the role of CA2 for coherent patterns of hippocampal network activity (sharp wave-ripple complexes, SPW-R; or gamma oscillations). CA2 expresses adenosine A1 receptors at high density which can be used to reduce or enhance local excitability. Extracellullar field potential recordings revealed SPW-R which propagated from CA3 to CA1. Local application of the A1-R agonist CCPA (10 µM) in CA2 eliminated local network activity, reduced SPW-R frequency in CA1 and delayed sharp wave propagation between CA3 and CA1. Application in CA3 or CA1 was much less effective. The A1-R receptor antagonist DPCPX (10 µM) had no consistent effects on propagating SPW-R. Carbachol-induced gamma oscillations were strongly correlated between CA3 and CA1. Application of the A1-R agonist to CA2 reduced the amplitude of the oscillation within CA2 and, most importantly, reduced correlation of gamma activity between CA3 and CA1. CCPA had similar but less prominent effects on the gamma amplitude after local application in CA3 and CA1. The A1-R antagonist DPCPX had opposite, but less pronounced effects consistent with some tonic adenosine activity during gamma. Our results reveal specific inhibition of CA2 neurons by adenosine A1 receptors. The CA2 network appears to form a critical interface for propagation and synchronization of network activity between CA3 and CA1.