Activity-dependent synaptic plasticity is critical for cortical circuit refinement. The synaptic homeostasis hypothesis suggests that synaptic connections are strengthened during wake and downscaled during sleep; however, it is not obvious how the same plasticity rules could explain both outcomes. Using whole-cell recordings and optogenetic stimulation of presynaptic input in urethane-anesthetized mice, which exhibit slow-wave-sleep (SWS)-like activity, we show that synaptic plasticity rules are gated by cortical dynamics in vivo. While Down states support conventional spike timing-dependent plasticity, Up states are biased toward depression such that presynaptic stimulation alone leads to synaptic depression, while connections contributing to postsynaptic spiking are protected against this synaptic weakening. We find that this novel activity-dependent and input-specific downscaling mechanism has two important computational advantages: (1) improved signal-to-noise ratio, and (2) preservation of previously stored information. Thus, these synaptic plasticity rules provide an attractive mechanism for SWS-related synaptic downscaling and circuit refinement.