GABA mediates inhibitory synaptic transmission in the mammalian brain. GABA is synthesized through two glutamate decarboxylases, GAD67 and GAD65. My thesis addresses two questions of GABA signaling through the genetic manipulation of the GABA synthetic enzymes.First, I examined the role of GABA transmission in inhibitory synapse development in the mouse neocortex. I used a genetic strategy to specifically block GABA synthesis or release in single neurons and examined the impact on axon and synapse development. Such cell autonomous manipulation of GABA signaling without disturbing circuitactivity level is critical to reveal its precise function in synapse formation. Chronic blockade of transmission caused a profound increase in axon and bouton density with apparently normal synapse structures, suggesting the involvement of GABA in synapse elimination and axon pruning. Live imaging showed that developing GABA axons formmany transient boutons and only a subset of them are stabilized. Acute blockade of GABA transmission led to significantly increased bouton stability and density, increased axon extension and decreased axon retraction. Together, these results suggest that developing GABAergic axons are capable of highly exuberant axon growth and form alarge number of transient contacts throughout their length while searching for potential synaptic partners; GABA transmission is crucial to eliminate inappropriate contacts and validate appropriate contacts, thereby sculpting the pattern of synaptic connections guided by activity.Second, I developed a method to monitor the physiological state of GABAergic neurons through visualizing activity dependent transcription of the Gad67 gene. Gad67, the best characterized activity regulated gene in GABAergic neurons, is dynamically regulate during development and by sensory experience. I generated two versions of knock-in reporter mice; Gad67-d2EGFP and Gad67- t2a-nls-d4EGFP, both express a short half-life EGFP under the control of the endogenous Gad67 promoter. I showed that GFP fluorescence reliably reports Gad67 transcription bi-directionally in response to pathological, pharmacological and physiological stimuli. Furthermore, in a chronic restraint stress paradigm, the reporter revealed cell-type specific change in the hippocampus.Therefore, these reporters allow visualization of the transcriptional state of the Gad67 gene with cellular and cell type resolution and will facilitate our understanding of plasticity in GABAergic neuronal circuits.