γ-Aminobutyric acid (GABA) is the main inhibitory neurotransmitter in the mature brain but has the paradoxical property of depolarizing neurons during early development. Depolarization provided by GABA A transmission during this early phase regulates neural stem cell proliferation, neural migration, neurite outgrowth, synapse formation, and circuit refinement, making GABA a key factor in neural circuit development. Importantly, depending on the context, depolarizing GABA A transmission can either drive neural activity or inhibit it through shunting inhibition. The varying roles of depolarizing GABA A transmission during development, and its ability to both drive and inhibit neural activity, makes it a difficult developmental cue to study. This is particularly true in the later stages of development when the majority of synapses form and GABA A transmission switches from depolarizing to hyperpolarizing. Here, we addressed the importance of depolarizing but inhibitory (or shunting) GABA A transmission in glutamatergic synapse formation in hippocampal CA1 pyramidal neurons. We first showed that the developmental depolarizing-to-hyperpolarizing switch in GABA A transmission is recapitulated in organotypic hippocampal slice cultures. Based on the expression profile of K + −Cl − co-transporter 2 (KCC2) and changes in the GABA reversal potential, we pinpointed the timing of the switch from depolarizing to hyperpolarizing GABA A transmission in CA1 neurons. We found that blocking depolarizing but shunting GABA A transmission increased excitatory synapse number and strength, indicating that depolarizing GABA A transmission can restrain glutamatergic synapse formation. The increase in glutamatergic synapses was activity-dependent but independent of BDNF signaling. Importantly, the elevated number of synapses was stable for more than a week after GABA A inhibitors were washed out. Together these findings point to the ability of immature GABAergic transmission to restrain glutamatergic synapse formation and suggest an unexpected role for depolarizing GABA A transmission in shaping excitatory connectivity during neural circuit development.