G protein-activated inwardly rectifying potassium (GIRK) channels mediate slow synaptic inhibition and control neuronal excitability. It is unknown whether GIRK channels are subject to regulation by guanine dissociation inhibitor (GDI) proteins like LGN, a mammalian homolog of Drosophila Partner of Inscuteable (mPINS). Here we report that LGN increases basal GIRK current but reduces GIRK activation by metabotropic transmitter receptors coupled to Gi or Go, but not Gs. Moreover, expression of its N-terminal, TPR-containing protein interaction domains mimics the effects of LGN in mammalian cells, probably by releasing sequestered endogenous LGN. In hippocampal neurons, expression of LGN, or LGN fragments that mimic or enhance LGN activity, hyperpolarizes the resting potential due to increased basal GIRK activity and reduces excitability. Using Lenti virus for LGN RNAi to reduce endogenous LGN levels in hippocampal neurons, we further show an essential role of LGN for maintaining basal GIRK channel activity and for harnessing neuronal excitability.