It is becoming apparent that the hormone leptin plays an important role in modulating hippocampal function. Indeed, leptin enhances NMDA receptor activation and promotes hippocampal long‐term potentiation (LTP). Furthermore, obese rodents with dysfunctional leptin receptors display impairments in hippocampal synaptic plasticity. Here we demonstrate that under conditions of enhanced excitability (evoked in Mg²⁺‐free medium or following blockade of GABA_A receptors), leptin induces a novel form of long‐term depression (LTD) in area CA1 of the hippocampus. Leptin‐induced LTD was markedly attenuated in the presence of D‐(‐)‐2‐Amino‐5‐Phosphonopentanoic acid (D‐AP5), suggesting that it is dependent on the synaptic activation of NMDA receptors. In addition, low‐frequency stimulus‐evoked LTD occluded the effects of leptin. In contrast, metabotropic glutamate receptors (mGluRs) did not contribute to leptin‐induced LTD as mGluR antagonists failed to either prevent or reverse this process. The signalling mechanisms underlying leptin‐induced LTD were independent of the Ras‐Raf‐mitogen‐activated protein kinase signalling pathway, but were markedly enhanced following inhibition of either phosphoinositide 3‐kinase or protein phosphatases 1 and 2A. These data indicate that under conditions of enhanced excitability, leptin induces a novel form of homosynaptic LTD, which further underscores the proposed key role for this hormone in modulating NMDA receptor‐dependent hippocampal synaptic plasticity.