Short-term plasticity was investigated at the perforant path-granule cell synapse in the hippocampal slice preparation. A successive decrement in the amplitude of the extracellular EPSP was obtained at all stimulus frequencies above 0.05 Hz. This effect of repetitive stimulation has previously been shown to fulfill the requirements for habituation processes. If each stimulus within an habituation train was followed by a second identical test stimulus the response to the test stimulus was larger than that to the paired conditioning stimulus. This short-term plasticity has been called paired pulse potentiation. The test response potentiated only with respect to the paired conditioning response and not with respect to previous test responses. Neither form of plasticity appeared to result from changes in the amplitude of the afferent fiber volley. Both habituation and paired pulse potentiation result from an interaction of at least three changes in the efficacy of transmission after a conditioning stimulus: (1) an initial depression, (2) an intermediate relative potentiation and (3) a late depression which decays slowly. Paired pulse potentiation could be demonstrated only if the interpair interval corresponded to the period of maximal late depression and the interstimulus interval to the period of relative potentiation. The amplitudes of intermediate relative potentiation and late depression (and inhibition of transmission by 2-amino-4-phosphonobutyric acid (APB)) were inversely related to the control response amplitude. This relationship likely derives from nonlinear stimulation of postsynaptic ionic currents at higher stimulus intensities. In contrast, the initial depression increased with response amplitude. This is consistent with a mechanism dependent on the postsynaptic membrane potential, such as refractoriness to succeeding stimuli. When the response amplitudes in the presence and absence of 2.5 mM APB were equalized by adjusting the stimulus intensity, no difference was found in the magnitude of either form of plasticity. Since APB probably inhibits transmission at this site through competitive antagonism at the postsynaptic receptor, this observation suggests that habituation and paired pulse potentiation are generated presynaptically.