GLT-1, the major glutamate transporter in the mammalian central nervous system, is expressed in presynaptic terminals that use glutamate as a neurotransmitter, in addition to astrocytes. It is widely assumed that glutamate homeostasis is regulated primarily by glutamate transporters expressed in astrocytes, leaving the function of GLT-1 in neurons relatively unexplored. We generated conditional GLT-1 knockout (KO) mouse lines to understand the cell-specific functions of GLT-1. We found that stimulus-evoked field extracellular postsynaptic potentials (fEPSPs) recorded in the CA1 region of the hippocampus were normal in the astrocytic GLT-1 KO but were reduced and often absent in the neuronal GLT-1 KO at 40 weeks. The failure of fEPSP generation in the neuronal GLT-1 KO was also observed in slices from 20 weeks old mice but not consistently from 10 weeks old mice. Using an extracellular FRET-based glutamate sensor, we found no difference in stimulus-evoked glutamate accumulation in the neuronal GLT-1 KO, suggesting a postsynaptic cause of the transmission failure. We hypothesized that excitotoxicity underlies the failure of functional recovery of slices from the neuronal GLT-1 KO. Consistent with this hypothesis, the non-competitive NMDA receptor antagonist MK801, when present in the ACSF during the recovery period following cutting of slices, promoted full restoration of fEPSP generation. The inclusion of an enzymatic glutamate scavenging system in the ACSF conferred partial protection. Excitotoxicity might be due to excess release or accumulation of excitatory amino acids, or to metabolic perturbation resulting in increased vulnerability to NMDA receptor activation. Previous studies have demonstrated a defect in the utilization of glutamate by synaptic mitochondria and aspartate production in the synGLT-1 KO in vivo, and we found evidence for similar metabolic perturbations in the slice preparation. In addition, mitochondrial cristae density was higher in synaptic mitochondria in the CA1 region in 20–25 weeks old synGLT-1 KO mice in the CA1 region, suggesting compensation for loss of axon terminal GLT-1 by increased mitochondrial efficiency. These data suggest that GLT-1 expressed in presynaptic terminals serves an important role in the regulation of vulnerability to excitotoxicity, and this regulation may be related to the metabolic role of GLT-1 expressed in glutamatergic axon terminals.