The synapse-level process by which neuron 'A' releases neurotransmitters that hyperpolarize the axon of another neuron 'B'. This reduces the number of neurotransmitter quanta released by B into the synapse it shares with another neuron 'C'. By reducing the amount of neurotransmitter in the synaptic junction, the tendancy for neuron B to fire neuron C is diminished.
This process underlies habituation, or learning to ignore (and reduce behavioral responses to) a repeated stimuli. The opposite of presynaptic inhibition is presynaptic excitation, by which cell A depolarizes the axon of B. This increasing the amount of transmitter released with each action potential, increasing the activation rate of cell C. Presynaptic excitation is the mechanism for sensitization.