The inhibitory surround signal in retinal ganglion cells is usually attributed to lateral horizontal cell signaling in the outer plexiform layer (OPL). However, recent evidence suggests that lateral inhibition at the inner plexiform layer (IPL) also contributes to the ganglion cell receptive field surround. Although amacrine cell input to ganglion cells mediates a component of this lateral inhibition, it is not known if presynaptic inhibition to bipolar cell terminals also contributes to surround signaling. We investigated the role of presynaptic inhibition by recording from bipolar cells in the salamander retinal slice. TTX reduced light-evoked GABAergic inhibitory postsynaptic currents (IPSCs) in bipolar cells, indicating that presynaptic pathways mediate lateral inhibition in the IPL. Photoreceptor and bipolar cell synaptic transmission were unaffected by TTX, indicating that its main effect was in the IPL. To rule out indirect actions of TTX, we bypassed lateral signaling in the outer retina by either electrically stimulating bipolar cells or by puffing kainate (KA) directly onto amacrine cell processes lateral to the recorded cell. In bipolar and ganglion cells, TTX suppressed laterally evoked IPSCs, demonstrating that both pre- and postsynaptic lateral signaling in the IPL depended on action potentials. By contrast, locally evoked IPSCs in both cell types were only weakly suppressed by TTX, indicating that local inhibition was not as dependent on action potentials. Our results show a TTX-sensitive lateral inhibitory input to bipolar cell terminals, which acts in concert with direct lateral inhibition to give rise to the GABAergic surround in ganglion cells.