Temporal lobe epilepsy is common and difficult to treat. Reduced inhibition of dentate granule cells may contribute. Basket cells are important inhibitors of granule cells. Excitatory synaptic input to basket cells and unitary IPSCs (uIPSCs) from basket cells to granule cells were evaluated in hippocampal slices from a rat model of temporal lobe epilepsy. Basket cells were identified by electrophysiological and morphological criteria. Excitatory synaptic drive to basket cells, measured by mean charge transfer and frequency of miniature EPSCs, was significantly reduced after pilocarpine-induced status epilepticus and remained low in epileptic rats, despite mossy fiber sprouting. Paired recordings revealed higher failure rates and a trend toward lower amplitude uIPSCs at basket cell-to-granule cell synapses in epileptic rats. Higher failure rates were not attributable to excessive presynaptic inhibition of GABA release by activation of muscarinic acetylcholine or GABA(B) receptors. High-frequency trains of action potentials in basket cells generated uIPSCs in granule cells to evaluate readily releasable pool (RRP) size and resupply rate of recycling vesicles. Recycling rate was similar in control and epileptic rats. However, quantal size at basket cell-to-granule cell synapses was larger and RRP size smaller in epileptic rats. Therefore, in epileptic animals, basket cells receive less excitatory synaptic drive, their pools of readily releasable vesicles are smaller, and transmission failure at basket cell-to-granule cell synapses is increased. These findings suggest dysfunction of the dentate basket cell circuit could contribute to hyperexcitability and seizures.