Multiple neuromodulators regulate neuronal response properties and synaptic connections in order to adjust circuit function. Inhibitory interneurons are a diverse group of cells that are differentially modulated depending on neuronal subtype and play key roles in regulating local circuit activity. Importantly, new tools to target specific subtypes are greatly improving our understanding of interneuron circuits and their modulation. Indeed, recent work has demonstrated that during different behavioral states interneuron activity changes in a subtype specific manner in both neocortex and hippocampus. Furthermore, in neocortex, modulation of specific interneuron microcircuits results in pyramidal cell disinhibition with important consequences for synaptic plasticity and animal behavior. Thus, neurmodulators tune the output of different interneuron subtypes to provide neural circuits with great flexibility.