Information processing in cortical neuronal networks relies on properly balanced excitatory and inhibitory neurotransmission. A ubiquitous motif for maintaining this balance is the somatostatin interneuron (SOM-IN) feedback microcircuit. Here, we investigate the modulation of this microcircuit by presynaptic GABAB receptors (GABABRs) in the rat hippocampus. Whole-cell recordings from SOM-INs reveal that both excitatory and inhibitory synaptic inputs are strongly inhibited by GABABRs, while optogenetic activation of the interneurons shows that their inhibitory output is also strongly suppressed. Electron microscopic analysis of immunogold-labelled freeze-fracture replicas confirms that GABABRs are highly expressed presynaptically at both input and output synapses of SOM-INs. Activation of GABABRs selectively suppresses the recruitment of SOM-INs during gamma oscillations induced in vitro. Thus, axonal GABABRs are positioned to efficiently control the input and output synapses of SOM-INs and can functionally uncouple them from local network with implications for rhythmogenesis and the balance of entorhinal versus intrahippocampal afferents.