Neuropeptide galanin and galanin-like peptide (GALP) share similar amino acid sequence and presumably interact with the same group of receptors, but they differentially regulate a variety of physiological and pathophysiological processes including metabolism and reproduction. Here, we explored the neurophysiological basis of the in vivo differential effect between galanin and GALP by examining galanin and GALP modulation of neuronal activities of neurons in the arcuate nucleus (Arc), a brain region critically involved in energy homeostasis and reproductive function. We demonstrated that galanin and GALP inhibited excitatory postsynaptic currents (EPSCs) and inhibitory postsynaptic currents (IPSCs) in a similar way. In contrast, galanin and GALP differentially affected the intrinsic membrane property. In most recorded Arc neurons galanin perfusion induced significant hyperpolarization of the resting membrane potential, which was not affected by GALP perfusion. In addition, galanin perfusion substantially suppressed the spontaneous spike firing in most Arc neurons, whereas in response to GALP perfusion about half of the Arc neurons exhibited mild reduction in spontaneous spike firing and the other half showed enhancement. Furthermore, the Arc neurons that had been previously responsive to galanin perfusion no longer responded to galanin if co-applied with GALP, indicating that GALP can physiologically antagonize galanin effect. This differential effect appears to be mediated by G-protein within the recorded cell, as the galanin effect on firing rate was abolished when the recorded cell was loaded with GDP--S, an agent which blocks G-protein activity. Taken together, these differential effects of galanin and GALP may provide a neurophysiological mechanism through which galanin and GALP differentially regulate energy balance, reproductive function and other physiological processes.