Evidence from several brain regions suggests gamma-aminobutyric acid (GABA) can exert a trophic influence during development, expanding the role of this amino acid beyond its function as an inhibitory neurotransmitter. Proliferating precursor cells in the neocortical ventricular zone (VZ) express functional GABA(A) receptors as do immature postmigratory neurons in the developing cortical plate (CP); however, GABA(A) receptor properties in these distinct cell populations have not been compared. Using electrophysiological techniques in embryonic and early postnatal neocortex, we find that GABA(A) receptors expressed by VZ cells have a higher apparent affinity for GABA and are relatively insensitive to receptor desensitization compared with neurons in the CP. GABA-induced current magnitude increases with maturation with the smallest responses found in recordings from precursor cells in the VZ. No evidence was found that GABA(A) receptors on VZ cells are activated synaptically, consistent with previous data suggesting that these receptors are activated in a paracrine fashion by nonsynaptically released ligand. After neurons are born and migrate to the CP, they begin to demonstrate spontaneous synaptic activity, the majority of which is GABA(A) mediated. These spontaneous GABA(A) postsynaptic currents (sPSCs) first were detected at embryonic day 18 (E18). At birth, approximately 50% of recordings from cortical neurons demonstrated GABA(A)-mediated sPSCs, and this value increased with age. GABA(A)-mediated sPSCs were action potential dependent and arose from local GABAergic interneurons. GABA application could evoke action potential-dependent PSCs in neonatal cortical neurons, suggesting that during the first few postnatal days, GABA can act as an excitatory neurotransmitter. Finally, N-methyl-D-aspartate (NMDA)- but not non-NMDA-mediated sPSCs were also present in early postnatal neurons. These events were not observed in cells voltage clamped at negative holding potentials (-60 to -70 mV) but were evident when the holding potential was set at positive values (+30 to +60 mV). Together these results provide evidence for the early maturation of GABAergic communication in the neocortex and a functional change in GABA(A)-receptor properties between precursor cells and early postmitotic neurons. The change in GABA(A)-receptor properties may reflect the shift from paracrine to synaptic receptor activation.