Patients and laboratory animal models of temporal lobe epilepsy display loss of layer III pyramidal neurons in medial entorhinal cortex and hyperexcitability and hypersynchrony of less vulnerable layer II stellate cells. We sought to test the hypothesis that loss of layer III pyramidal neurons triggers synaptic reorganization and formation of recurrent, excitatory synapses among layer II stellate cells in epileptic pilocarpine-treated rats. Laser-scanning photo-uncaging of glutamate focally activated neurons in layer II while excitatory synaptic responses were recorded in stellate cells. Photostimulation revealed previously unidentified, functional, recurrent, excitatory synapses between layer II stellate cells in control animals. Contrary to the hypothesis, however, control and epileptic rats displayed similar levels of recurrent excitation. Recently, hyperexcitability of layer II stellate cells has been attributed, at least in part, to loss of GABAergic interneurons and inhibitory synaptic input. To evaluate recurrent inhibitory circuits in layer II, we focally photostimulated interneurons while recording inhibitory synaptic responses in stellate cells. IPSCs were evoked more than five times more frequently in slices from control versus epileptic animals. These findings suggest that in this model of temporal lobe epilepsy, reduced recurrent inhibition contributes to layer II stellate cell hyperexcitability and hypersynchrony, but increased recurrent excitation does not.