Dopamine regulates the activity of neural networks in the prefrontal cortex that process working memory information, but its precise biophysical actions are poorly understood. The present study characterized the effects of dopamine on GABAergic inputs to prefrontal pyramidal neurons using whole-cell patch-clamp recordings in vitro. In most pyramidal cells, dopamine had a temporally biphasic effect on evoked IPSCs, producing an initial abrupt decrease in amplitude followed by a delayed increase in IPSC amplitude. Using receptor subtype-specific agonists and antagonists, we found that the initial abrupt reduction was D2 receptor-mediated, whereas the late, slower developing enhancement was D1 receptor-mediated. Linearly combining the effects of the two agonists could reproduce the biphasic dopamine effect. Because D1 agonists enhanced spontaneous (sIPSCs) but did not affect miniature (mIPSCs) IPSCs, it appears that D1 agonists caused larger evoked IPSCs by increasing the intrinsic excitability of interneurons and their axons. In contrast, D2 agonists had no effects on sIPSCs but did produce a significant reduction in mIPSCs, suggestive of a decrease in GABA release probability. In addition, D2 agonists reduced the postsynaptic response to a GABA(A) agonist. D1 and D2 receptors therefore regulated GABAergic activity in opposite manners and through different mechanisms in prefrontal cortex (PFC) pyramidal cells. This bidirectional modulation could have important implications for the computational properties of active PFC networks.