The entorhinal cortex provides the hippocampus with the majority of its sensory input. The entorhinal cortex also receives the largest output projection of the parasubiculum, a structure that receives output projections from the hippocampus. The parasubicular projection to the entorhinal cortex could play a critical role in determining how the entorhinal cortex responds to incoming sensory inputs. Therefore, alterations in how the entorhinal cortex responds to and processes sensory input, influenced by its projection from the parasubiculum, could be important for mnemonic processing the hippocampus. Neural activity in brain regions throughout the hippocampal formation, including the parasubiculum and entorhinal cortex, is heavily modulated by the neurotransmitter acetylcholine and the associated theta- and gamma-frequency oscillatory EEG rhythms. However, it is not known how cholinergic activity and synaptic inputs at these frequencies affect communication between the parasubiculum and entorhinal cortex, and how this could influence the processing of sensory inputs within the entorhinal cortex. The first experiments in this thesis utilized field potential recordings of excitatory postsynaptic potentials (fEPSPs), and found that activation of cholinergic receptors, despite reducing the amplitude of responses to single pulses of stimulation, facilitated entorhinal cortex responses during trains of stimulation of the parasubiculum at both theta- and gamma- frequencies. This effect was found to be reliant upon M1 muscarinic receptors and was associated with cholinergic reductions in the cationic conductance Ih. In a second series of experiments, intracellular recordings of EPSPs in stellate cells in layer II of the medial entorhinal cortex replicated the findings obtained in field potential recordings, and indicated that the facilitation of train-evoked responses at theta- and gamma-frequencies by cholinergic agonism is due in part to reductions in Ih that lead to increased input resistance and widening of EPSPs. In a third series of experiments, when a second stimulating electrode was placed in layer I of the medial entorhinal cortex to activate sensory input pathways, it was found that trains of stimulation in the iii parasubiculum at theta-frequency modulated the strength of subsequent entorhinal cortex responses to incoming layer I sensory inputs. Stimulation of the parasubiculum was found to either suppress or facilitate responses to layer I inputs depending on the interval between parasubicular and layer I stimulation, suggesting that the parasubiculum can influence the ongoing processing of sensory inputs by the entorhinal cortex. When prolonged, repetitive, delivery of theta-frequency parasubicular stimulation trains was paired with single pulses of stimulation of layer I at short intervals after each train, it was found that co-activation of these inputs pathways resulted in a selective and lasting depression of entorhinal cortex responses to layer I stimulation. These results indicate that activation of the parasubiculum can have a lasting impact on how the entorhinal cortex responds to sensory inputs. Overall these results have strong implications for how information is processed in the hippocampal formation, and suggest that parasubicular inputs to the entorhinal cortex can influence the nature of the sensory and associational information that the entorhinal cortex provides to the hippocampus.