The action of arginine vasopressin (AVP) in the rat hippocampal slice has been extensively studied. Extracellular recording indicates that the peptide excites spontaneously active neurons in the slice, though uncertainty exists regarding the identity of this cell type. Intracellular recording from pyramidal cells also reveals an excitatory action of the peptide, but these results are confounded by simultaneous constriction of small blood vessels that surround each pyramidal cell. Here we use field potential recordings to show that AVP inhibits pyramidal cell discharge and employs a pressor-type (V1) receptor to bring about its action. The results resolve issues regarding the identity of AVP targets in the slice. Each reported result is consistent with a model that posits direct AVP excitation of inhibitory interneurons and direct AVP constriction of slice microvessels. Inhibition of pyramidal cells recorded extracellularly and excitation of pyramidal cells recorded intracellularly are respective indirect consequences of the two direct effects.