Neuropeptide Y (NPY) gene transduction of the brain using viral vectors in epileptogenic regions can effectively suppress seizures in animals, and is being considered as a promising alternative treatment strategy for epilepsy. Therefore, it is fundamental to understand the detailed mechanisms governing the release and action of transgene NPY in neuronal circuitries. Using whole-cell recordings from subicular neurons, we show that in animals transduced by recombinant adeno-associated viral (rAAV) vector carrying the NPY gene, transgene NPY is released during high-frequency activation of CA1-subicular synapses. Released transgene NPY attenuates excitatory synaptic transmission not only in activated, but also in neighboring, non-activated synapses. Such broad action of transgene NPY may prevent recruitment of excitatory synapses in epileptic activity and could play a key role in limiting the spread and generalization of seizures.