Phasic GABAergic inhibition in hippocampus and neocortex falls into two kinetically distinct categories, GABA_A,fast and GABA_A,slow. In hippocampal area CA1, GABA_A,fast is generally believed to underlie GABA oscillations, whereas the contribution of GABA_A,slow to hippocampal rhythms has been speculative. Hypothesizing that GABA_A receptors containing the ₃ subunit contribute to GABA_A,slow inhibition, and that slow inhibitory synapses control excitability as well as contribute to network rhythms, we investigated the consequences of this subunit's absence on synaptic inhibition and network function. In pyramidal neurons of GABA_A receptor ₃ subunit-deficient (₃^-/-) mice, spontaneous GABA_A,slow IPSCs were much less frequent, and evoked GABA_A,slow currents were much smaller than in wild type mice. Fittingly, long-lasting recurrent inhibition of population spikes was less powerful in the mutant, indicating that receptors containing ₃ contribute substantially to GABA_A,slow currents in pyramidal neurons. By contrast, slow inhibitory control of GABA_A,fast-producing interneurons was unaffected in ₃^-/- mice. In vivo, hippocampal network activity was markedly different in the two genotypes. In ₃^-/- mice, epileptiform activity was observed, and theta oscillations were weaker, slower, less regular and less well coordinated across laminae in compared to wild type mice, whereas gamma oscillations were weaker and faster. The amplitude modulation of gamma oscillation on theta frequency ('nesting') was preserved, but was less well coordinated with theta oscillations. With the caveat that seizure-induced changes in inhibitory circuits might have contributed to changes observed in the mutant animals, our results point to a strong contribution of ₃ subunits to slow GABAergic inhibition onto pyramidal neurons but not onto GABA_A,fast-producing interneurons, and support different roles for these slow inhibitory synapses in the generation and coordination of hippocampal network rhythms.