ABSTRACT Birth stress is a strong risk factor for psychiatric disorders and associated with an exaggerated release of the stress hormone arginine vasopressin (AVP) into circulation and in the brain. While it has been shown that AVP promotes firing of GABAergic interneurons leading to suppression of spontaneous perinatal hippocampal network events that suggest a protective function, its effect on developing subcortical networks is not known. Here we tested the effect of AVP on the neonatal dorsal raphe nucleus (DRN) 5-hydroxytryptamine (5-HT, serotonin) system, since early 5-HT homeostasis is critical for the development of cortical brain regions and emotional behaviors. Using in vitro electrophysiological recording techniques, we show that AVP strongly excites neonatal 5-HT neurons via V 1A receptors by increasing their excitatory synaptic inputs. Accordingly, AVP also promotes action potential firing through a combination of its effect on glutamatergic synaptic transmission and a direct effect on the excitability of 5-HT neurons. Our in vivo single unit recordings of identified neonatal 5-HT neurons under light urethane anaesthesia revealed two major firing patterns of neonatal 5-HT neurons, tonic regular firing and low frequency oscillations of regular spike trains. We confirmed that AVP also increases firing activity of putative 5-HT neurons in neonatal DRN in vivo . Finally, we show that neonatal DRN contains a sparse vasopressinergic innervation that is strongly sex dependent and originates exclusively from vasopressinergic cell groups in medial amygdala and bed nucleus of stria terminalis (BNST). Our results show, that in contrast to developing cortical networks where AVP promotes inhibition, AVP can also be strongly excitatory in immature subcortical networks such as the DRN 5-HT system. Hyperactivation of the neonatal 5-HT system by AVP during birth stress may impact its own ongoing functional development as well as affect maturation of cortical target regions, which may increase the risk for psychiatric conditions later on. Author Contributions E.O. performed and analysed the in vitro electrophysiological experiments, related immunohistochemistry of filled neurons as well as image analysis, B.K. and H.H. conducted and analysed the in vivo juxtacellular electrophysiological recordings and labelling, related immunohistochemistry of labelled neurons and image analysis, H.H. did the multi-channel in vivo electrophysiological recordings and intracerebral injections as well as related histology, H.T-G. analysed the multi-channel in vivo electrophysiological data, B.K. and H.H. performed the tracing experiments, E.O. and H.H. carried out immunohistochemistry related to the tracing experiments, E.O. performed image analysis related to tracing experiments, M.S. performed and analysed AVP immunocytochemistry experiments in neonatal DRN, H.H. and S.E.L. provided resources for the experimental work and supervised the project. H.H. conceptualized and coordinated the project. The manuscript was written by H.H. with significant contributions from all authors.