Although NPY has been shown to influence the action of many transmitters in the brain, modulation of GABA, the primary inhibitory transmitter, has not been detected with electrophysiology. Using whole-cell patch-clamp recording, we found that NPY has a large modulatory effect on GABAergic neurons of the suprachiasmatic nucleus (SCN) that act as the circadian clock in the mammalian brain. NPY, acting at both Y1- and Y2-like receptors, reduced the frequency of spontaneous miniature inhibitory postsynaptic currents while having little effect on the postsynaptic GABA receptors, suggesting a presynaptic mechanism of NPY action. In single self-innervating neurons, application of either Y1 or Y2 agonists to the same neuron significantly inhibited the evoked autaptic GABA release. The use of single-neuron microcultures has allowed the demonstration that a single peptide, NPY, has two different receptors coded for by different genes in the same axon terminal. The Y1 and Y2 agonists also inhibited whole-cell calcium currents when applied to the same neuron, indicating a coexistence of Y1- and Y2-like receptors in the postsynaptic cell body. The self-innervating cell model we use here may be applicable generally for discriminating presynaptic versus postsynaptic actions of other neurotransmitters and neuromodulators and locating their subtype receptors.