Despite a wealth of in vitro and modelling studies it remains unclear how neuronal populations in the cerebellum interact in vivo. We address the issue of how the cerebellar input layer processes sensory information, with particular focus on the granule cells ( input relays) and their counterpart inhibitory interneurones, Golgi cells. Based on the textbook view, granule cells excite Golgi cells via glutamate forming a negative feedback loop. However, Golgi cells express inhibitory mGluR2 receptors suggesting an inhibitory role for glutamate. We set out to test this glutamatergic paradox in Golgi cells. Here we show that granule cells and Golgi cells interact through extra-synaptic signalling mechanisms during sensory information processing, as well as synaptic mechanisms. We demonstrate that such interactions depend on granule cell-derived glutamate acting via inhibitory mGluR2 receptors leading causally to the suppression of Golgi cell activity for several hundreds of milliseconds. We further show that granule cell-derived inhibition of Golgi cell activity is regulated by GABA-dependent extra-synaptic Golgi cell inhibition of granule cells, identifying a regulatory loop in which glutamate and GABA may be critical regulators of Golgi cell-granule cell functional activity. Thus, granule cells may promote their own prolonged activity via paradoxical feed-forward inhibition of Golgi cells, thereby enabling information processing over long timescales.