Excitatory hilar mossy cells (MCs) in the dentate gyrus receive inputs from dentate granule cells (GCs) and project back to GCs locally, contralaterally, and along the longitudinal axis of the hippocampus, thereby establishing an associative positive-feedback loop and connecting functionally diverse hippocampal areas. MCs also synapse with GABAergic interneurons that mediate feed-forward inhibition onto GCs. Surprisingly, although these circuits have been implicated in both memory formation (e.g., pattern separation) and temporal lobe epilepsy, little is known about activity-dependent plasticity of their synaptic connections. Here, we report that MC-GC synapses undergo a presynaptic, NMDA-receptor-independent form of long-term potentiation (LTP) that requires postsynaptic brain-derived neurotrophic factor (BDNF)/TrkB and presynaptic cyclic AMP(cAMP)/PKA signaling. This LTP is input specific and selectively expressed at MC-GC synapses, but not at the disynaptic inhibitory loop. By increasing the excitation/inhibition balance, MC-GC LTP enhances GC output at the associative MC-GC recurrent circuit and may contribute to dentate-dependent forms of learning and epilepsy.