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Estrogens are believed to modulate cognitive functions in part through the modulation of synaptic transmission in the cortex and hippocampus. Administration of 17ß-estradiol (E2) can rapidly enhance excitatory synaptic transmission in the hippocampus and facilitate excitatory synaptic transmission in rat lateral entorhinal cortex via activation of the G protein-coupled estrogen receptor-1 (GPER1). To assess the mechanisms through which GPER1 activation facilitates synaptic transmission, we assessed the effects of acute 10 nM E2 administration on pharmacologically isolated evoked excitatory and inhibitory synaptic currents in layer II/III entorhinal neurons. Female Long-Evans rats were ovariectomized between postnatal day (PD) 63 and 74 and implanted with a subdermal E2 capsule to maintain continuous low levels of E2. Electrophysiological recordings were obtained between 7 and 20 days after ovariectomy. Application of E2 for 20 min did not significantly affect AMPA or NMDA receptor-mediated excitatory synaptic currents. However, GABA receptor-mediated inhibitory synaptic currents (IPSCs) were markedly reduced by E2 and returned towards baseline levels during the 20-min washout period. The inhibition of GABA-mediated IPSCs was blocked in the presence of the GPER1 receptor antagonist G15. GPER1 can modulate protein kinase A (PKA), but blocking PKA with intracellular KT5720 did not prevent the E2-induced reduction in IPSCs. GPER1 can also stimulate extracellular signal-regulated kinase (ERK), a negative modulator of GABA_A receptors, and blocking activation of ERK with PD90859 prevented the E2-induced reduction of IPSCs. E2 can therefore result in a rapid GPER1 and ERK signaling-mediated reduction in GABA-mediated IPSCs. This provides a novel mechanism through which E2 can rapidly modulate synaptic excitability in entorhinal layer II/III neurons and may also contribute to E2 and ERK-dependent alterations in synaptic transmission in other brain areas.