Neurosteroids are produced in the brain independently of peripheral endocrine glands to act locally in the nervous system. They exert potent promnesic effects and play significant roles in mental health-related disorders. In part, neurosteroids act by affecting ligand-gated ion channels and metabotropic receptors through rapid non-genomic processes. We have previously demonstrated that neurosteroids also affect synaptic transmission presynaptically in the CA1 region of the hippocampus. Here we describe the effects of the most abundant neurosteroid in the rodent brain, pregnenolone sulfate (PregS), on signal processing in the dentate subfield of the hippocampus. We show that PregS acts presynaptically at low concentrations (300 nM) to enhance paired-pulse facilitation (PPF) in perforant pathway terminals on dentate granule cells. Similar effects were found with two steroid sulfatase inhibitors demonstrating a potential contribution of endogenous steroids to dentate synaptic plasticity. This enhanced presynaptic facilitation paradoxically increases paired-pulse inhibition (PPI) at short interpulse intervals. Based on these data, a model of dentate gyrus circuit interactions is proposed for the presynaptic action of PregS on the filtering dynamics of the dentate subfield at frequencies similar to those of the endogenous signals from the entorhinal cortex. These modeling studies are consistent with experimental measurements demonstrating positive modulation by PregS at low frequencies and negative modulation at high frequencies. These studies show an important role for the presynaptic action of neurosteroids in modulating input signals to the hippocampus.