The effects of ethanol on spontaneous excitatory and inhibitory postsynaptic currents (EPSCs and IPSCs) were studied in a culture of embryonic rat cortical neurons. In these experiments, EPSCs and IPSCs were recorded concurrently as inward and outward currents, respectively. These spontaneous currents were dominated by a slow (<1 Hz) repetitive pattern of prolonged N-methyl D-aspartate (NMDA)-EPSCs and co-occurring IPSCs when Mg2+ was left out of the perfusate. A 3- to 5-min bath perfusion of 100 mM ethanol reduced the average integrated EPSC by 65%, while simultaneously potentiating IPSCs by about 3-fold. EPSC frequency was also reduced by about one-third. NMDA-mediated EPSCs were inhibited more than non-NMDA currents. A perfusion of 30 mM ethanol was less effective and probably represents a threshold concentration for these effects. The ethanol inhibition of currents evoked by directly applied glutamate or NMDA to these cells was much less than that observed for spontaneous EPSCs. Currents evoked by exogenous gamma-aminobutyric acid (GABA) application were never potentiated by ethanol. When spontaneous NMDA-EPSCs were blocked with an NMDA antagonist, ethanol no longer potentiated the IPSCs. However, benzodiazepine treatment increased these IPSCs 2-fold. In other experiments, spontaneous IPSCs were blocked by a GABA(A) antagonist. Here, the EPSCs occurred as groups of repetitive bursts. Ethanol decreased the total number of EPSCs per burst but did not decrease their overall amplitude, as in the control recordings. Thus, the way in which ethanol affects concurrently recorded spontaneous EPSCs and IPSCs appears different from the way in which it affects isolated GABA- and NMDA-evoked currents. In addition, the antagonist studies show that concurrently activated NMDA and GABA channels each tend to limit the responses of the other. Thus, the overall effect of ethanol on spontaneous activity may result, in part, by a modification of this synaptic interaction.