The alpha7 subtype of nicotinic receptor is highly expressed in the hippocampus where it is purported to modulate release of the inhibitory neurotransmitter gamma-aminobutyric acid (GABA). The alpha7 receptor-mediated release of GABA is thought to contribute to hippocampal inhibition (gating) of response to repetitive auditory stimulation. This hypothesis is supported by observations of hippocampal auditory gating deficits in mouse strains with low levels of hippocampal alpha7 receptors compared to strains with high levels of hippocampal alpha7 receptors. The difficulty with comparisons between mouse strains, however, is that different strains have different genetic backgrounds. Thus, the observed interstrain differences in hippocampal auditory gating might result from factors other than interstrain variations in the density of hippocampal alpha7 receptors. To address this issue, hippocampal binding of the alpha7 receptor-selective antagonist alpha-bungarotoxin as well as hippocampal auditory gating characteristics were compared in C3H wild type and C3H alpha7 receptor null mutant heterozygous mice. The C3H alpha7 heterozygous mice exhibited significant reductions in hippocampal alpha7 receptor levels and abnormal hippocampal auditory gating compared to the C3H wild type mice. In addition, a general increase in CA3 pyramidal neuron responsivity was observed in the heterozygous mice compared to the wild type mice. These data suggest that decreasing hippocampal alpha7 receptor density results in a profound alteration in hippocampal circuit function.