Heparin-binding growth-associated molecule (HB-GAM) is an 18-kDa developmentally regulated protein, which promotes neurite outgrowth, axonal guidance and synaptogenesis through interaction with cell-surface heparan-sulphate proteoglycans. We have studied the effect of HB-GAM on synaptic transmission and long-term potentiation (LTP) in the area CA1 of rat hippocampal slices, where HB-GAM mRNA is expressed in an activity-dependent manner. Injection of recombinant HB-GAM into the dendritic area inhibited tetanus-induced LTP without affecting baseline synaptic responses or the N-methyl-D-aspartate (NMDA)-receptor mediated transmission. HB-GAM did not depotentiate tetanus-induced LTP or prevent heterosynaptic LTP induced by application of tetraethylammonium (TEA), indicating that the effect was limited to early, synapse-specific stages of LTP induction. These results suggest that HB-GAM is involved in the regulation of synaptic plasticity in hippocampus.