Hippocampal pathology is likely to contribute to cognitive disability in Down syndrome, yet the neural network basis of this pathology and its contributions to different facets of cognitive impairment remain unclear. Here we report dysfunctional connectivity between dentate gyrus and CA3 networks in the transchromosomic Tc1 mouse model of Down syndrome, demonstrating that ultrastructural abnormalities and impaired short-term plasticity at dentate gyrus-CA3 excitatory synapses culminate in impaired coding of new spatial information in CA3 and CA1 and disrupted behavior in vivo. These results highlight the vulnerability of dentate gyrus-CA3 networks to aberrant human chromosome 21 gene expression and delineate hippocampal circuit abnormalities likely to contribute to distinct cognitive phenotypes in Down syndrome.