The delta subunit of the GABA(A) receptor (GABA(A)R) is highly expressed in the dentate gyrus of the hippocampus. Genetic deletion of this subunit reduces synaptic and extrasynaptic inhibition and decreases sensitivity to neurosteroids. This paper examines the effect of these changes on hippocampus-dependent trace fear conditioning. Compared to controls, delta knockout mice exhibited enhanced acquisition of tone and context fear. Hippocampus-independent delay conditioning was normal in these animals. These results suggest that reduced inhibition in the dentate gyrus facilitates the acquisition of trace fear conditioning. However, the enhancement in trace conditioning was only observed in female knockout mice. The sex-specificity of this effect may be a result of neuroactive steroids. These compounds vary during the estrus cycle, can increase GABAergic inhibition, and have been shown to impair hippocampus-dependent learning. We propose that activation of GABA(A)Rs by neuroactive steroids inhibits learning processes in the hippocampus. Knockouts are immune to this effect because of the reduced neurosteroid sensitivity that accompanies deletion of the delta subunit. Relationships between neurosteroids, hippocampal excitability, and memory are discussed.