Early γ-aminobutyric acid mediated (GABAergic) synaptic transmission and correlated neuronal activity are fundamental to network formation; however, their regulation during early postnatal development is poorly understood. Nitric oxide (NO) is an important retrograde messenger at glutamatergic synapses, and it was recently shown to play an important role also at GABAergic synapses in the adult brain. The subcellular localization and network effect of this signaling pathway during early development are so far unexplored, but its disruption at this early age is known to lead to profound morphological and functional alterations. Here, we provide functional evidence--using whole-cell recording--that NO signaling modulates not only glutamatergic but also GABAergic synaptic transmission in the mouse hippocampus during the early postnatal period. We identified the precise subcellular localization of key elements of the underlying molecular cascade using immunohistochemistry at the light--and electron microscopic levels. As predicted by these morpho-functional data, multineuron calcium imaging in acute slices revealed that this NO-signaling machinery is involved also in the control of synchronous network activity patterns. We suggest that the retrograde NO-signaling system is ideally suited to fulfill a general presynaptic regulatory role and may effectively fine-tune network activity during early postnatal development, while GABAergic transmission is still depolarizing.