Histone deacetylase 2 (HDAC2) negatively regulates excitatory synapse number and memory performance. However, whether HDAC2 regulation of excitatory synapses occurs in a cell-autonomous manner and whether HDAC2 regulates inhibitory synaptic functions are not well understood. To examine these aspects of HDAC2 function, we used sparse transfection of rat hippocampal slice cultures and whole-cell recordings in pyramidal neurons. HDAC2 knockdown (KD) in single postsynaptic pyramidal neurons enhanced, whereas HDAC2 overexpression (OE) reduced, excitatory synaptic transmission. Postsynaptic KD of HDAC2 also facilitated expression of long-term potentiation induced by subthreshold induction stimuli, without altering long-term depression. In contrast, HDAC2 KD reduced, whereas HDAC2 OE enhanced, inhibitory synaptic transmission. Alterations of postsynaptic GABA(A) receptors (GABA(A)Rs) likely underlie the impact of HDAC2 on inhibitory transmission. Consistent with this, we observed reduced transcript and protein levels of the GABA(A)R γ2 subunit and reduced surface expression of the α2 subunit after HDAC2 KD. Furthermore, we observed a reduction in synaptic but not tonic GABA(A)R currents by HDAC2 KD, suggesting that HDAC2 selectively affects synaptic abundance of functional GABA(A)Rs. Immunostaining for postsynaptic GABA(A)Rs confirmed that HDAC2 KD and OE can regulate the synaptic abundance of these receptors. Together, these results highlight a role for HDAC2 in suppressing synaptic excitation and enhancing synaptic inhibition of hippocampal neurons. Therefore, a shift in the balance of synaptic excitation versus inhibition favoring excitation could contribute to the beneficial effects of reducing HDAC2 function in wild-type mice or of inhibiting HDACs in models of cognitive impairment.