The stratum lacunosum-moleculare of the hippocampus is an area of integration that receives inputs from extrinsic excitatory fibres including those from the entorhinal cortex, and is under the control of several neuromodulators. A critical aspect is the presence in this hippocampal layer of specific interneurons that are likely to influence the strength and the temporal structure of entorhinal–CA1 hippocampal dynamics. I review here recent data on the physiological role of these interneurons. Special focus is devoted to one interneuron type, the so-called neurogliaform cell, because recent studies have defined its unusual mode of cell-to-cell communication. Neurogliaform cells mediate feedforward inhibition of CA1 pyramidal cells, form a network of cells connected via chemical and electrical synapses, and evoke slow inhibitory synaptic currents mediated by GABAA and GABAB receptors. The modulation of entorhinal input by neurogliaform cells and their contribution to network theta rhythm are also discussed. I hope that novel information on neurogliaform cells will contribute to the ever-growing appreciation of GABAergic cell type diversity, and will inspire neuroscientists interested not only in synaptic physiology but also in the brain's spatial representation system.