Neurons receive correlated levels of excitation and inhibition, a feature that is important for proper brain function. In fact, a dysregulation in the balance between excitation and inhibition has been linked to many neurodevelopmental disorders, including autism, schizophrenia, and epilepsy. However, how this relationship between excitatory and inhibitory inputs is established during the dynamic period of circuit wiring remains unexplored. Using multiple techniques, including in utero electroporation, electron microscopy and electrophysiology, we reveal a tight correlation in the distribution of excitatory and inhibitory synapses along the basal dendrites of developing CA1 hippocampal neurons. This correlation was present within short dendritic stretches (<20µm), and surprisingly, was most pronounced during early development (as early as Post Natal Day 7), sharply declining with maturity, reaching a significantly reduced level by PND21. The tight matching between excitation and inhibition was unexpected, as inhibitory synapses lacked an active zone when formed and exhibited compromised evoked release, and increased failure rate. We propose that inhibitory synapses form as a stabilising scaffold, to counterbalance growing excitation levels. This relationship diminishes over time, suggesting a critical role for a subcellular balance in early neuronal function and circuit formation.