Recent studies on the anatomical and functional organization of GABAergic networks in central auditory circuits of the zebra finch have highlighted the strong impact of inhibitory mechanisms on both the central encoding and processing of acoustic information in a vocal learning species. Most of this work has focused on the caudomedial nidopallium (NCM), a forebrain area postulated to be the songbird analogue of the mammalian auditory association cortex. NCM houses neurons with selective responses to conspecific songs and is a site thought to house auditory memories required for vocal learning and, likely, individual identification. Here we review our recent work on the anatomical distribution of GABAergic cells in NCM, their engagement in response to song and the roles for inhibitory transmission in the physiology of NCM at rest and during the processing of natural communication signals. GABAergic cells are highly abundant in the songbird auditory forebrain and account for nearly half of the overall neuronal population in NCM with a large fraction of these neurons activated by song in freely-behaving animals. GABAergic synapses provide considerable local, tonic inhibition to NCM neurons at rest and, during sound processing, may contain the spread of excitation away from un-activated or quiescent parts of the network. Finally, we review our work showing that GABA A -mediated inhibition directly regulates the temporal organization of song-driven responses in awake songbirds, and appears to enhance the reliability of auditory encoding in NCM.