The two principal movement-suppressing pathways of the basal ganglia, the so-called hyperdirect and indirect pathways, interact within the subthalamic nucleus (STN). An appropriate level and pattern of hyperdirect pathway cortical excitation and indirect pathway external globus pallidus (GPe) inhibition of the STN are critical for normal movement and are greatly perturbed in Parkinson's disease. Here we demonstrate that motor cortical inputs to the STN heterosynaptically regulate, through activation of postsynaptic NMDA receptors, the number of functional GABA_A receptor-mediated GPe-STN inputs. Therefore, a homeostatic mechanism, intrinsic to the STN, balances cortical excitation by adjusting the strength of GPe inhibition. However, following the loss of dopamine, excessive cortical activation of STN NMDA receptors triggers GPe-STN inputs to strengthen abnormally, contributing to the emergence of pathological, correlated activity.