Striatal inhibition plays an important role in models of cortex-basal ganglia function and is altered in many basal ganglia diseases. The ␥-aminobutyric acid ergic spiny projection neuron comprises >95% of striatal neurons, but despite strong anatomical evidence, the electrophysiological properties and functions of their local axon collaterals are unknown. We simultaneously recorded from adjacent spiny projection neurons (<5-10 m) in whole-cell patch mode and demonstrated a fast synaptic connection between 26͞69 pairs in cortex-striatum-substantia nigra organotypic cultures and 5͞38 pairs in acute striatal slices. The synapse, which was blocked by ␥-aminobutyric acid type A antagonists, displayed a wide range of failure rates, was depolarizing at rest, and reversed above ؊60 mV. Presynaptic bursts of action potentials were highly correlated with total postsynaptic depolarization at rest. Synaptic transmission was optimized for burst discharge >14 Hz and showed considerable short-term plasticity, including paired-pulse depression at intervals <25 ms, intraburst facilitation, and interburst augmentation. This activity-dependent collateral interaction provides the basis for a new class of basal ganglia models in which striatal neurons cooperate as well as compete during processing of cortical inputs.I nformation from cortex is processed in several parallel pathways by the basal ganglia and sent back to the cortex via thalamus (1). In these cortex-basal ganglia loops, the striatum is the first stage where inputs from many cortical areas converge onto ␥-aminobutyric acid (GABA)ergic spiny projection neurons (2), which comprise Ͼ95% of the striatum. Cortical inputs depolarize these neurons from resting potential, the down-state, to a subthreshold membrane potential range, the up-state, during which spiny projection neurons fire episodic bursts of action potentials (3). Because these neurons directly inhibit neurons in globus pallidus and substantia nigra, which constitute basal ganglia outputs, understanding the factors that control up-state generation and action potential firing in spiny projection neurons is a prerequisite for understanding basal ganglia function.Since their first anatomical description by Ramon y Cajal (4), it has been known that spiny projection neurons, in addition to projecting out of the striatum, possess extensive local axon collaterals (5, 6) and make synaptic contacts among each other (7,8). This view led in many basal ganglia models to treat the striatum as a lateral inhibition network (9-13) in which cortical inputs compete at the striatal level for control of basal ganglia outputs. Despite this popular view of striatal function, however, direct electrophysiological evidence of synaptic transmission between identified spiny projection neurons has been elusive (14). This discrepancy implied that intrastriatal synaptic inhibition is dominated by few striatal GABAergic interneurons (15), in particular fast spiking interneurons (16,17). Because an imbalance of striatal GABAergic transmission i...