Stress is known to induce both structural and physiological changes in the brain. Here we analyzed the inhibitory neurotransmission in the adult rat hippocampus of animals exposed to chronic mild stress for eight weeks. This protocol is recognized to induce anhedonic-like behaviors in rodents mimicking depressive symptoms seen in humans. Specifically, our objective was to investigate electrophysiological changes in the g-aminobutyric acid (GABA)ergic system in the dentate gyrus of acute 350 mm thick brain slices. First we analyzed the spontaneous inhibitory postsynaptic currents (sIPSCs) recorded from voltage clamped (-70 mV) granule cells. In cells from stressed rats we observed a decrease to 41% of the frequency recorded from controls (2.0 ± 0.52 Hz, n = 18 cells/7 rats versus 4.9 ± 1.1 Hz, n = 24 cells/11 rats, P < 0.05). Paired- pulse stimulation revealed a ratio of the evoked IPSCs in control granule cells of 0.76 ± 0.054 (n = 16) while it was 1.2 ± 0.14 (n = 14) in stressed rats (P = 0.0079). Additionally, stressed rats showed an enhanced response to the extrasynaptic GABA_A receptor agonist THIP (4,5,6,7-tetrahydro-isoxazolo[5,4-c]pyridin- 3-ol). The average THIP-activated tonic current in stressed animals was at 59.2 ± 5.5 pA, n = 18 compared to 36.4 ± 4 pA, n = 12. Five weeks treatment with the antidepressant escitalopram partially, but significantly, reversed the sIPSC frequency in parallel with behavioral read outs. In conclusion, we have revealed a dysfunction in the GABAergic system in the chronic mild stress model of depression in rats, caused by a reduction in action potential dependent GABA release. Since the function of the GABAergic system was improved by antidepressant treatment, it suggests a role of the GABAergic system in the pathophysiology of depression.