Typically, D1 and D2 dopamine (DA) receptors exert opposing actions on intracellular signaling molecules and often have disparate physiological effects; however, the factors determining preferential activation of D1 versus D2 signaling are not clear. Here, in vitro patch-clamp recordings show that DA concentration is a critical determinant of D1 versus D2 signaling in prefrontal cortex (PFC). Low DA concentrations (<500 nm) enhance IPSCs via D1 receptors, protein kinase A, and cAMP. Higher DA concentrations (>1 microm) decrease IPSCs via the following cascade: D2-->G(i)-->platelet-derived growth factor receptor--> increase phospholipase C--> increase IP3--> increase Ca2+--> decrease dopamine and cAMP-regulated phosphoprotein-32--> increase protein phosphatase 1/2A--> decrease GABA(A). Blockade of any molecule in the D2-linked pathway reveals a D1-mediated increase in IPSCs, suggesting that D1 effects are occluded at higher DA concentrations by this D2-mediated pathway. Thus, DA concentration, by acting through separate signaling cascades, may determine the relative amount of cortical inhibition and thereby differentially regulate the tuning of cortical networks.