The recently discovered GABA B receptor-positive allosteric modulators enhanced the potency and efficacy of GABA B receptor agonists in in vitro experiments. These GABA B modulators also attenuated reward and anxiety in behavioral experiments without causing the untoward side effects associated with GABA B receptor activation by agonist administration and hence exhibited potential therapeutic utility. However, the underlying molecular mechanisms enabling the GABA B allosteric modulators to dissociate from the GABA B agonistic side effects remain elusive. To address this question, we have examined the effects of a typical GABA B modulator, 2,6-di-tert-butyl-4-(3-hydroxy-2,2-dimethylpropyl)-phenol (CGP7930), on GABA B receptor-mediated modulations of both the excitatory and the delayed inhibitory components of hippocampal CA1 synaptic transmission. Using baclofen as an agonist and a multielectrode recording system, we recorded GABA B receptor-mediated modulations of both the field excitatory postsynaptic potentials and the population spikes simultaneously, as well as the paired-pulse inhibition of the population spike. We found that CGP7930 selectively enhanced the baclofen-induced modulation of synaptic inhibition without having any significant effects on the synaptic excitation. Our experiments have therefore revealed a pathway-selective differential modulation of synaptic transmission by CGP7930. This finding provides a synaptic mechanism to support the hypothesis that GABA B potentiators may be a better therapeutic alternative than GABA B agonists for central nervous system disorders.