Abstract Temporal lobe epilepsy is related to many structural and physiological changes in the brain. We used kainic acid in rats as an animal model of temporal lobe epilepsy, and studied the neural interactions of the dentate gyrus in urethane-anesthetized rats in vivo. Our initial hypothesis was that sprouting of mossy fibers, the axons of the granule cells, increases proximal dendritic excitatory currents in the inner molecular layer of the dentate gyrus. Extracellular currents were detected in vivo using current source density analysis. Backfiring the mossy fibers in CA3 or orthodromic excitation of the granule cells through the medial perforant path induced a current sink at the inner molecular layer. However, the sink or inferred excitation at the inner molecular layer was not increased in kainic acid-treated rats and the sink actually correlated negatively with the degree of mossy fiber sprouting. It is inferred that the latter sink was mediated mainly by association fibers and not by recurrent mossy fibers. After kainic acid treatment, paired–pulse inhibition of the population spikes in the dentate gyrus was increased. In contrast, reverberant activity that involved looping around an entorhinal–hippocampal circuit was increased in kainic acid-treated rats, compared to control rats. The increase of inhibition in kainic acid-treated rats was readily blocked by a small dose of GABA A receptor antagonist bicuculline. The latter dose of bicuculline induced paroxsymal spike bursts in kainic acid-treated but not control rats, demonstrating that the increased inhibition in dentate gyrus was fragile. In conclusion, after kainic acid induced seizures, the dentate gyrus in vivo showed an increase in inhibition that appeared to be fragile. The hypothesized increase in proximal dendritic excitation due to mossy fiber sprouting was not detected. However, the fragile inhibition could explain the seizure susceptibility in patients with temporal lobe epilepsy.