Although serotonin (5-HT) is an important neuromodulator in the superficial layers of the medial entorhinal cortex (mEC), there is some disagreement concerning its influences upon the membrane properties of neurons within this region. We performed whole cell recordings of mEC Layer II projection neurons in rat brain slices in order to characterize the intrinsic influences of 5-HT. In current clamp, 5-HT evoked a biphasic response consisting of a moderately short latency and large amplitude hyperpolarization followed by a slowly developing, long lasting, and small amplitude depolarization. Correspondingly, in voltage clamp, 5-HT evoked a robust outward followed by a smaller inward shift of holding current. The outward current evoked by 5-HT showed a consistent current/voltage (I/V) relationship across cells with inward rectification, and demonstrating a reversal potential that was systematically dependent upon the extracellular concentration of K(+), suggesting that it was predominantly carried by potassium ions. However, the inward current showed a less consistent I/V relationship across different cells, suggesting multiple independent ionic mechanisms. The outward current was mediated through activation of 5-HT(1A) receptors via a G-protein dependent mechanism while inward currents were evoked in a 5-HT(1A)-independent fashion. A significant proportion of the inward current was blocked by the I(h) inhibitor ZD7288 and appeared to be due to 5-HT modulation of I(h) as 5-HT shifted the activation curve of I(h) in a depolarizing fashion. Serotonin is thus likely to influence, in a composite fashion, the information processing of Layer II neurons in the mEC and thus, the passage of neocortical information via the perforant pathway to the hippocampus.