Kainate-type glutamate receptors (KARs) regulate synaptic transmission and neuronal excitability via multiple mechanisms, depending on their subunit composition. Presynaptic KARs tonically depress glutamatergic transmission during restricted period of synapse development; however, the molecular basis behind this effect is unknown. Here, we show that the developmental and cell-type specific expression pattern of a KAR subunit splice variant, GluK1c, corresponds to the immature-type KAR activity in the hippocampus. GluK1c localizes to dendritic contact sites at distal axons, the distal targeting being promoted by heteromerization with the subunit GluK4. Presynaptic expression of GluK1c strongly suppresses glutamatergic transmission in cell-pairs in vitro and mimics the immature-type KAR activity at CA3-CA1 synapses in vivo, at a developmental stage when the endogenous expression is already downregulated. These data support a central role for GluK1c in mediating tonic inhibition of glutamate release and the consequent effects on excitability and activity-dependent fine-tuning of the developing hippocampal circuitry.