During neuronal activity, extracellular potassium concentration ([K+]out) becomes elevated and, if uncorrected, causes neuronal depolarization, hyperexcitability, and seizures. Clearance of K+ from the extracellular space, termed K+ spatial buffering, is considered to be an important function of astrocytes. Results from a number of studies suggest that maintenance of [K+]out by astrocytes is mediated by K+ uptake through the inward-rectifying Kir4.1 channels. To study the role of this channel in astrocyte physiology and neuronal excitability, we generated a conditional knock-out (cKO) of Kir4.1 directed to astrocytes via the human glial fibrillary acidic protein promoter gfa2. Kir4.1 cKO mice die prematurely and display severe ataxia and stress-induced seizures. Electrophysiological recordings revealed severe depolarization of both passive astrocytes and complex glia in Kir4.1 cKO hippocampal slices. Complex cell depolarization appears to be a direct consequence of Kir4.1 removal, whereas passive astrocyte depolarization seems to arise from an indirect developmental process. Furthermore, we observed a significant loss of complex glia, suggestive of a role for Kir4.1 in astrocyte development. Kir4.1 cKO passive astrocytes displayed a marked impairment of both K+ and glutamate uptake. Surprisingly, membrane and action potential properties of CA1 pyramidal neurons, as well as basal synaptic transmission in the CA1 stratum radiatum appeared unaffected, whereas spontaneous neuronal activity was reduced in the Kir4.1 cKO. However, high-frequency stimulation revealed greatly elevated posttetanic potentiation and short-term potentiation in Kir4.1 cKO hippocampus. Our findings implicate a role for glial Kir4.1 channel subunit in the modulation of synaptic strength.