It has been proposed that the prefrontal cortex modulates neural activity in posterior cortex via inhibitory mechanisms. As a result, damage to the former area may produce disinhibition in posterior regions and increase sensitivity to extraneous information. This hypothesis was investigated by examining how prefrontal cortex lesions affected the firing of hippocampal place cells in freely moving rats. In experiment 1, the positional firing of lesion-group cells was altered to a greater extent than that of control-group cells when objects were introduced into the recording environment. This suggested that place cell firing was overly influenced by local cues in the prefrontal-lesioned animals. In experiment 2 place cells were recorded while rats foraged on a circular track with access to both local and distal multimodal cues. Although the position of place fields in lesion-group cells was not excessively tied to local cues, a greater proportion of the fields lost their spatial selectivity following a rotation of these cues. The cue-related effects were associated with larger extracellular action-potential amplitudes and a greater incidence of burst-firing in lesion-group cells. This finding is consistent with the hypothesis that lesions of the prefrontal cortex result in a disinhibition of posterior cortex.