The inhibitory effects of extracellular adenosine 5'-triphosphate (ATP) are reviewed in the present paper. ATP inhibits the release of the excitatory transmitter glutamate and stimulates the release of the inhibitory transmitter GABA from hippocampal neurons. Also, ATP activates potassium conductance directly through G protein, resulting in hyperpolarization of membrane potential. ATP activates microglia to secrete plasminogen that promotes the development of mesencephalic dopaminergic neurons and enhances neurite outgrowth from explants of neocortical tissue. Moreover, ATP may protect hippocampal neurons from excitotoxic cell death by preserving mitochondrial function. Thus, ATP may have a role in the protection of the function of hippocampus from over-stimulation by glutamate.