The neuronal and synaptic organisation of the cerebral cortex appears exceedingly complex, and the definition of a basic cortical circuit in terms of defined classes of cells and connections is necessary to facilitate progress of its analysis. During the last two decades quantitative studies of the synaptic connectivity of identified cortical neurones and their molecular dissection revealed a number of general rules that apply to all areas of cortex. In this review, first the precise location of postsynaptic GABA and glutamate receptors is examined at cortical synapses, in order to define the site of synaptic interactions. It is argued that, due to the exclusion of G protein-coupled receptors from the postsynaptic density, the presence of extrasynaptic receptors and the molecular compartmentalisation of the postsynaptic membrane, the synapse should include membrane areas beyond the membrane specialisation. Subsequently, the following organisational principles are examined: 1. The cerebral cortex consists of: (i) a large population of principal neurones reciprocally connected to the thalamus and to each other via axon collaterals releasing excitatory amino acids, and, (ii) a smaller population of mainly local circuit GABAergic neurones. 2. Differential reciprocal connections are also formed amongst GABAergic neurones. 3. All extrinsic and intracortical glutamatergic pathways terminate on both the principal and the GABAergic neurones, differentially weighted according to the pathway. 4. Synapses of multiple sets of glutamatergic and GABAergic afferents subdivide the surface of cortical neurones and are often co-aligned on the dendritic domain. 5. A unique feature of the cortex is the GABAergic axo-axonic cell, influencing principal cells through GABAA receptors at synapses located exclusively on the axon initial segment. The analysis of these salient features of connectivity has revealed a remarkably selective array of connections, yet a highly adaptable design of the basic circuit emerges when comparisons are made between cortical areas or layers. The basic circuit is most obvious in the hippocampus where a relatively homogeneous set of spatially aligned principal cells allows an easy visualization of the organisational rules. Those principles which have been examined in the isocortex proved to be identical or very similar. In the isocortex, the basic circuit, scaled to specific requirements, is repeated in each layer. As multiple sets of output neurones evolved, requiring subtly different needs for their inputs, the basic circuit may be superimposed several times in the same layer. Tangential intralaminar connections in both the hippocampus and isocortex also connect output neurones with similar properties, as best seen in the patchy connections in the isocortex. The additional radial superposition of several laminae of distinct sets of output neurones, each representing and supported by its basic circuit, requires a co-ordination of their activity that is mediated by highly selective interlaminar connections, involving both the GABAergic and the excitatory amino acid releasing neurones. The remarkable specificity in the geometry of cells and the selectivity in placement of neurotransmitter receptors and synapses on their surface, strongly suggest a predominant role for time in the coding of information, but this does not exclude an important role also for the rate of action potential discharge in cortical representation of information.