Specialized cells in the medial entorhinal cortex (mEC), such as speed cells, head direction (HD) cells, and grid cells, are thought to support spatial navigation. To determine whether these computations are dependent on local circuits, we record neuronal activity in mEC layers II and III and optogenetically perturb locally projecting layer II pyramidal cells. We find that sharply tuned HD cells are only weakly responsive while speed, broadly tuned HD cells, and grid cells show pronounced transient excitatory and inhibitory responses. During the brief period of feedback inhibition, there is a reduction in specifically grid accuracy, which is corrected as firing rates return to baseline. These results suggest that sharp HD cells are embedded in a separate mEC sub-network from broad HD cells, speed cells, and grid cells. Furthermore, grid tuning is not only dependent on local processing but also rapidly updated by HD, speed, or other afferent inputs to mEC.