Electrophysiological studies have shown that activation of glucocorticoids receptors (GRs) influences neuronal excitability and activity dependent synaptic plasticity. In developmental studies, early life stimulation such as neonatal handling results in an up-regulation of glucocorticoid-receptor (GR) binding in the hippocampus that persists into adulthood. It is, therefore, hypothesized that early environment-induced changes in receptor sensitivity to corticosterone (CORT) might have functional effects on adult neuronal excitability and synaptic plasticity. To test this hypothesis, we exposed rats daily from post-natal days 1-21 to a non-home environment for 3 min. When the animals became adults, we studied the effects of glucocorticoid hormone corticosterone (CORT) on population spike (PS) amplitude and long-term potentiation of population spikes (PS-LTP) in vitro in the hippocampal CA1 region following activation of the Schaffer collateral fibers. Bath application of CORT reduced PS amplitude and subsequent induction of PS-LTP. This inhibitory effect of CORT was significantly greater in the slices from the novelty exposed rats (Novel) than the control rats that remained in their home cage (Home). Inhibition of population spike amplitude during CORT perfusion was 28.0+/-5.3% of baseline in Novel slices, and 9.1+/-4.4% in Home slices. CORT pre-exposure (20 min) also inhibited the subsequent induction of PS-LTP in Novel slices by 57.7+/-17.7% and by 7.5+/-12.1% in Home slices. These results provide electrophysiological evidence that neonatal novelty exposure results in functional increases in receptor sensitivity to CORT that enhances the inhibitory effects of CORT on field CA1 neuronal excitability and plasticity.