The medial entorhinal cortex (MEC) is a major center for spatial navigation and memory. We found that cannabinoid type 1 receptor-expressing GABAergic basket cells selectively innervated principal cells in layer II of the rat MEC that projected outside the hippocampus but avoided neighboring cells that give rise to the perforant pathway to the dentate gyrus. These results indicate that the organization of GABAergic microcircuits reflects the long-distance axonal targets of principal neurons.