Activity-dependent changes in synaptic strength are well established as mediating long-term plasticity underlying learning and memory, but modulation of target neuron excitability could complement changes in synaptic strength and thereby regulate network activity [1, 2]. It is thought that homeostatic mechanisms match intrinsic excitability to the incoming synaptic drive, but direct evidence for signalling to voltage-gated conductances is sparse. Regulation of neuronal excitability and synaptic strength must preserve or maintain the basic physiology and yet permit adaptive processes. How are these adaptations of target neuron excitability achieved? In addition to changes in excitatory synaptic strength (e.g. LTP/LTD), synaptic activity also regulates voltage-gated conductances in target neurons [3], implying mediation by glutamatergic signalling. Such regulation of postsynaptic neuronal excitability and network function is widely reported (e.g. hippocampus, cortex and auditory brainstem) and given the ubiquitous nature of glutamatergic synaptic transmission, it is likely to be of global significance in regulating neuronal network function. Nitric oxide (NO) is involved in processes regulating LTP/LTD mechanisms [4] and produced via neuronal nitric oxide synthase (nNOS). nNOS is broadly expressed in the brain and associated with synaptic plasticity through NMDAR-mediated calcium influx. However, its physiological activation and the exact mechanisms by which NO influences synaptic transmission have proved elusive. Here, we use the calyx of Held synapse within the medial nucleus of the trapezoid body (MNTB) and hippocampal CA3 pyramidal neurons to characterize NO modulation of postsynaptic high-voltage activated K+ channels. We have previously shown that NO is generated in an activity-dependent manner by MNTB principal neurons receiving a calyceal synaptic input [5]. Generation of NO occurs in the active neuron but it can exert its actions in the target neuron itself or in adjacent inactive neurons via volume transmission. Diffusion of NO allows modulation of excitability and synaptic efficacy by inhibiting postsynaptic Kv3 potassium currents in a PKC-dependent manner (via phosphorylation) following moderate activation times (up to 25min). This reduction in Kv3 currents led to increasing action potential duration and reduced transmission fidelity. Longer periods of glutamatergic synaptic activity (more than 60min) induce an additional NO-dependent potentiation of Kv2 channels. The net effect is to switch the basis of action potential repolarization from Kv3 to Kv2 potassium channel dominance, thereby adjusting neuronal signalling between low and high activity states, respectively. This time-dependent and NO-mediated signalling dramatically increases Kv2 conductances in both the auditory brain stem and hippocampus (>3-fold) transforming synaptic integration and information transmission but with only modest changes in action potential waveform [6]. Evidence that this signalling pathway is active under physiological conditions was gained from recordings made within 15 min of brain isolation, which showed enhanced Kv2 currents and the amplitude of which decayed within 30 min in vitro. This potentiated current was absent in neurons from Kv2.2 or nNOS KO mice. The data suggest that NO exerts its actions as a volume transmitter and slow dynamic modulator, integrating spontaneous and evoked neuronal firing, thereby providing an index of global activity and regulating information transmission across a population of active and inactive neurons within the MNTB and hippocampus. We conclude that NO is a homeostatic regulator, tuning neuronal excitability to the recent history of excitatory synaptic inputs over intervals of minutes to hours.