Direct effect of type-II corticosteroid receptor agonist dexamethasone on extracellular amino acid levels and neuronal excitability in the hippocampus was studied by simultaneous application of in vivo microdialysis and recording hippocampal evoked responses in freely moving male rats. Microdialysis probes and hippocampal recording electrodes were implanted to the CA1-CA3 regions of dorsal hippocampus. Local dexamethasone infusion via microdialysis resulted in a transient increase in glutamate level at 30 min, while glutamine decreased by 30-40% throughout the 180-min sampling period. Taurine increased by 50% and remained elevated up to 180 min. No significant changes were detected in extracellular concentration of asparagine, arginine, glycine, threonine, alanine and serine. In contrast, dexamethasone infusion to the striatum had no effect on the extracellular levels of amino acid transmitters. Effect of dexamethasone injected via microdialysis on the neural activity elicited by perforant path stimulation was a decrease in population spikes after 60 min starting dexamethasone infusion. Steroid effect on neural excitability was reversible. Our data indicate that local infusion of type-II receptor agonist dexamethasone has a complex effect in the hippocampus, starts with a change in extracellular glutamate and glutamine concentration and followed by a reduced synaptic excitability.