Persistent activity is postulated to drive neural network plasticity and learning. To investigate its underlying cellular mechanisms, we developed a biophysically tractable model that explains the emergence, sustenance and eventual termination of short-term persistent activity. Using the model, we reproduced the features of reverberating activity that were observed in small (50–100 cells) networks of cultured hippocampal neurons, such as the appearance of polysynaptic current clusters, the typical inter-cluster intervals, the typical duration of reverberation, and the response to changes in extra-cellular ionic composition. The model relies on action potential-triggered residual pre-synaptic calcium, which we suggest plays an important role in sustaining reverberations. We show that reverberatory activity is maintained by enhanced asynchronous transmitter release from pre-synaptic terminals, which in itself depends on the dynamics of residual pre-synaptic calcium. Hence, asynchronous release, rather than being a 'synaptic noise', can play an important role in network dynamics. Additionally, we found that a fast timescale synaptic depression is responsible for oscillatory network activation during reverberations, whereas the onset of a slow timescale depression leads to the termination of reverberation. The simplicity of our model enabled a number of predictions that were confirmed by additional analyses of experimental manipulations.