Young adult-born granule cells (abGCs) in the dentate gyrus (DG) have a profound impact on cognition and mood. However, it remains unclear how abGCs distinctively contribute to local DG information processing. We found that the actions of abGCs in the DG depend on the origin of incoming afferents. In response to lateral entorhinal cortex (LEC) inputs, abGCs exert monosynaptic inhibition of mature granule cells (mGCs) through group II metabotropic glutamate receptors. By contrast, in response to medial entorhinal cortex (MEC) inputs, abGCs directly excite mGCs through N-methyl-D-aspartate receptors. Thus, a critical function of abGCs may be to regulate the relative synaptic strengths of LEO-driven contextual information versus MEC-driven spatial information to shape distinct neural representations in the DG.