Forty-five years ago the surprising discovery was made, in a Melbourne University laboratory, that peripheral synapses exist that release neither noradrenaline nor acetylcholine. The same laboratory went on to show that one of these then novel transmitters is adenosine 5'-triphosphate (ATP), for which a class of receptors has been dubbed P2X7. Recent linkage studies have shown that the P2X7 gene is associated with major depression and bipolar disorder. This speculative paper considers possible mechanisms that could link polymorphisms in the P2X7 gene with the functioning of neural networks, especially in the hippocampus. A selective review of the neurobiological literature on the location and function of the P2X7 receptor at synapses and on astrocytes as well as microglial cells was performed in the context of determining viable hypotheses as to the function of these receptors during synaptic transmission in the neural networks of the hippocampus. It is suggested that P2X7 receptors participate in a regenerative loop at central glutamatergic synapses. In this loop glutamate-evoked release of ATP from both astrocytes and microglia cells, as well as ATP derived from an autocatalytic release from astrocytes, provides purines that can act on presynaptic P2X7 purinergic receptors. This increases glutamate release to further the amount of ATP at the synapse, leading to a new functional state of the neural network in which the synapse participates. This synaptic ATP can also act on microglia P2X7 receptors to release the cytokine tumour necrosis factor-alpha (TNF-alpha), as can glutamate, with this TNF-alpha acting on the post-synaptic neuronal membrane to increase glutamate alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionate (AMPA) receptors there. As synaptic ATP and glutamate are maintained by the regenerative loop they provide a sustained release of TNF-alpha, and therefore of AMPA receptor enhancement, increasing synaptic efficacy, and so contributing to the new functional state of the neural network. Infections can change this state by activating toll-like (TOL) receptors on the microglia concomitantly with their P2X7 receptor activation by the regenerative loop, thereby releasing the cytokine interleukin-1beta, which decreases the AMPA receptors in the neural membrane, so decreasing synaptic efficacy and changing the functional state of the neural network in which the synapse resides. Polymorphisms in the P2X7 gene that modify operation of the regenerative loop or the release of cytokines, as can infections, change the functional state of neural networks, which may then lead to vulnerability to mood disorders.