Originally ascribed passive roles in the CNS, astrocytes are now known to have an active role in the regulation of synaptic transmission. Neuronal activity can evoke Ca2+ transients in astrocytes, and Ca2+ transients in astrocytes can evoke changes in neuronal activity. The excitatory neurotransmitter glutamate has been shown to mediate such bidirectional communication between astrocytes and neurons. We demonstrate here that ATP, a primary mediator of intercellular Ca2+ signaling among astrocytes, also mediates intercellular signaling between astrocytes and neurons in hippocampal cultures. Mechanical stimulation of astrocytes evoked Ca2+ waves mediated by the release of ATP and the activation of P2 receptors. Mechanically evoked Ca2+ waves led to decreased excitatory glutamatergic synaptic transmission in an ATP-dependent manner. Exogenous application of ATP does not affect postsynaptic glutamatergic responses but decreased presynaptic exocytotic events. Finally, we show that astrocytes exhibit spontaneous Ca2+ waves mediated by extracellular ATP and that inhibition of these Ca2+ responses enhanced excitatory glutamatergic transmission. We therefore conclude that ATP released from astrocytes exerts tonic and activity-dependent down-regulation of synaptic transmission via presynaptic mechanisms.