There is growing evidence that adenosine plays a crucial role in basal ganglia function, particularly in the modulation of voluntary movement. An adenosine-based treatment for Parkinson's disease shows promise in recent clinical studies. Adenosine A(2A) receptors, the receptors involved in this treatment, are highly expressed in the neostriatum. Previous studies have suggested opposing actions of these receptors on synaptic transmission at striatal and pallidal terminals of the same spiny projection neurons, but the cells of origin of the intrastriatal terminals mediating these actions have not been identified. We used dual whole cell recordings to record simultaneously from pairs of striatal cells; this enabled definitive identification of the presynaptic and postsynaptic cells mediating the effects of A(2A) receptors. We found that A(2A) receptors facilitate GABAergic synaptic transmission by intrastriatal collaterals of the spiny projection neurons, consistent with their previously reported actions on synaptic transmission at pallidal terminals. This neuromodulatory action on lateral inhibition in the striatum may underlie, in part, the therapeutic efficacy of adenosine-based treatments for Parkinson's disease.