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Neuronal activity within the physiologic range stimulates lactate production that, via metabolic pathways or operating through an array of G-protein-coupled receptors, regulates intrinsic excitability and synaptic transmission. The recent discovery that lactate exerts a tight control of ion channels, neurotransmitter release, and synaptic plasticity-related intracellular signaling cascades opens up the possibility that lactate regulates synaptic potentiation at central synapses. Here, we demonstrate that extracellular lactate (1-2 mM) induces glutamatergic potentiation on the recurrent collateral synapses of hippocampal CA3 pyramidal cells. This potentiation is independent of lactate transport and further metabolism, but requires activation of NMDA receptors, postsynaptic calcium accumulation, and activation of a G-protein-coupled receptor sensitive to cholera toxin. Furthermore, perfusion of 3,5- dihydroxybenzoic acid, a lactate receptor agonist, mimics this form of synaptic potentiation. The transduction mechanism underlying this novel form of synaptic plasticity requires G-protein βγ subunits, inositol-1,4,5-trisphosphate 3-kinase, PKC, and CaMKII. Activation of these signaling cascades is compartmentalized in a synapse-specific manner since lactate does not induce potentiation at the mossy fiber synapses of CA3 pyramidal cells. Consistent with this synapse-specific potentiation, lactate increases the output discharge of CA3 neurons when recurrent collaterals are repeatedly activated during lactate perfusion. This study provides new insights into the cellular mechanisms by which lactate, acting via a membrane receptor, contributes to the memory formation process.