Faithful representation of sound envelopes in primary auditory cortex (A1) is vital for temporal processing and perception of natural sounds. However, the emergence of cortical temporal processing mechanisms during development remains poorly understood. Although cortical inhibition has been proposed to play an important role in this process, direct in-vivo evidence has been lacking. Using loose-patch recordings in rat A1 immediately after hearing onset, we found that stimulus-following ability in fast-spiking neurons was significantly better than in regular-spiking (RS) neurons. In-vivo whole-cell recordings of RS neurons revealed that inhibition in the developing A1 demonstrated much weaker adaptation to repetitive stimuli than in adult A1. Furthermore, inhibitory synaptic inputs were of longer duration than observed in vitro and in adults. Early in development, overlap of the prolonged inhibition evoked by 2 closely following stimuli disrupted the classical temporal sequence between excitation and inhibition, resulting in slower following capacity. During maturation, inhibitory duration gradually shortened accompanied by an improving temporal following ability of RS neurons. Both inhibitory duration and stimulus-following ability demonstrated exposure-based plasticity. These results demonstrate the role of inhibition in setting the pace for experience-dependent maturation of temporal processing in the auditory cortex.