Previous studies have demonstrated the presence of functional glycine receptors (GlyRs) in hippocampus. In this work, we examine the baseline activity and activity-dependent modulation of GlyRs in region CA1. We find that strychnine-sensitive GlyRs are open in the resting CA1 pyramidal cell, creating a state of tonic inhibition that “shunts” the magnitude of EPSPs evoked by electrical stimulation of the Schaffer collateral inputs. This GlyR-mediated shunting conductance is independent of the presynaptic stimulation rate; however, pairs of presynaptic and postsynaptic action potentials, repeated at frequencies above 5 Hz, reduce the GlyR-mediated conductance and increase peak EPSP magnitudes to levels at least 20% larger than those seen with presynaptic stimulation alone. We refer to this phenomenon as rate-dependent efficacy (RDE). Exogenous GlyR agonists (glycine, taurine) block RDE by preventing the closure of postsynaptic GlyRs. The GlyR antagonist strychnine blocks postsynaptic GlyRs under all conditions, occluding RDE. During RDE, GlyRs are less responsive to local glycine application, suggesting that a reduction in the number or sensitivity of membrane-inserted GlyRs underlies RDE. By extending the RDE induction protocol to include 500 paired presynaptic and postsynaptic spikes, we can induce long-term synaptic depression (LTD). Manipulations that lead to reduced functionality of GlyRs, either pharmacologically or through RDE, also lead to increased LTD. This result suggests that RDE contributes to long-term synaptic plasticity in the hippocampus.