Sensory and sensorimotor gating deficits are observed in schizophrenia. GABAB receptor deficiency is also detected in the hippocampus of schizophrenic patients. The present study tested the hypothesis that GABAB receptors in the hippocampus contribute to paired-pulse gating of hippocampal auditory-evoked potentials (AEP) and auditory prepulse inhibition (PPI) in Long-Evans rats. Gating of hippocampal AEP, or PPI, was examined before and after administration of GABAB receptor antagonist, CGP56999A or CGP35348, or saline was administered either systemically (intra-peritoneally (i.p.)) or infused bilaterally into the hippocampus 15 min before gating measurements. Systemic injection of CGP56999A, at a dose of 0.2 and 0.4 mg/kg i.p. resulted in reduced gating of hippocampal AEP in a dose-dependent manner. Reduced gating was found at conditioning-test interpulse intervals of 300–500 ms, but not 100–200 ms. Reduced gating of hippocampal AEP also followed bilateral infusion of CGP56999A into the hippocampus (0.1 μg/μL/side). Gating loss was attributed to a decreased conditioning response and an increased test response after systemic or local injection of CGP56999A. Robust PPI was found at prepulse–pulse intervals of 30–100 ms, and this PPI was reduced by hippocampal infusion of CGP56999A in a dose-dependent manner, as compared with saline infusion. Blockade of hippocampal GABAB receptors led to deficits in sensory and sensorimotor gating, which are symptoms of schizophrenia.