The cerebellar granular layer has been suggested to perform a complex spatiotemporal reconfiguration of incoming mossy fiber signals. Central to this role is the inhibitory action exerted by Golgi cells over granule cells: Golgi cells inhibit granule cells through both feedforward and feedback inhibitory loops and generate a broad lateral inhibition that extends beyond the afferent synaptic field. This characteristic connectivity has recently been investigated in great detail and been correlated with specific functional properties of these neurons. These include theta-frequency pacemaking, network entrainment into coherent oscillations and phase resetting. Important advances have also been made in terms of determining the membrane and synaptic properties of the neuron, and clarifying the mechanisms of activation by input bursts. Moreover, voltage sensitive dye imaging and multi-electrode array (MEA) recordings, combined with mathematical simulations based on realistic computational models, have improved our understanding of the impact of Golgi cell activity on granular layer circuit computations. These investigations have highlighted the critical role of Golgi cells in: generating dense clusters of granule cell activity organized in center-surround structures, implementing combinatorial operations on multiple mossy fiber inputs, regulating transmission gain, and cut-off frequency, controlling spike timing and burst transmission, and determining the sign, intensity and duration of long-term synaptic plasticity at the mossy fiber-granule cell relay. This review considers recent advances in the field, highlighting the functional implications of Golgi cells for granular layer network computation and indicating new challenges for cerebellar research.