The present paper examines the nature and function of brain-derived neurotrophic factor (BDNF) in the hippocampal formation and the consequences of changes in its expression. The paper focuses on literature describing the role of BDNF in hippocampal development and neuroplasticity. BDNF expression is highly sensitive to developmental and environmental factors, and increased BDNF signaling enhances neurogenesis, neurite sprouting, electrophysiological activity, and other processes reflective of a general enhancement of hippocampal function. Such increases in activity may mediate beneficial effects such as enhanced learning and memory. However, the increased activity also comes at a cost: BDNF plasticity renders the hippocampus more vulnerable to hyperexcitability and/or excitotoxic damage. Exercise dramatically increases hippocampal BDNF levels and produces behavioral effects consistent with this phenomenon. In analyzing the literature regarding exercise-induced regulation of BDNF, this paper provides a theoretical model for how the potentially deleterious consequences of BDNF plasticity may be modulated by other endogenous factors. The peptide galanin may play such a role by regulating hippocampal excitability.