Basket cells are key GABAergic inhibitory interneurons that target the somata and proximal dendrites, enabling efficient control of the timing and rate of spiking of their postsynaptic targets. In all cortical circuits, there are two major types of basket cell that exhibit striking developmental, molecular, anatomical, and physiological differences. In this talk, I will discuss recent results that reveal the tightly coupled complementarity of these two key microcircuit regulatory modules, demonstrating a novel form of brain-state-specific segregation of inhibition during spontaneous behavior, with implications for the assessment of dysregulated inhibition in epilepsy. In addition, I will describe recent advances in our understanding of the spatio-temporal dynamics of endocannabinoid signaling in hippocampal circuits and discuss how abnormal amplification of these activity-dependent signaling processes leads to surprising downstream effects in seizures.