Alzheimer's disease (AD) results in cognitive decline and altered network activity, but the mechanisms are unknown. We studied human amyloid precursor protein (hAPP) transgenic mice, which simulate key aspects of AD. Electroencephalographic recordings in hAPP mice revealed spontaneous epileptiform discharges, indicating network hypersynchrony, primarily during reduced gamma oscillatory activity. Because this oscillatory rhythm is generated by inhibitory parvalbumin (PV) cells, network dysfunction in hAPP mice might arise from impaired PV cells. Supporting this hypothesis, hAPP mice and AD patients had decreased levels of the interneuron-specific and PV cell-predominant voltage-gated sodium channel subunit Nav1.1. Restoring Nav1.1 levels in hAPP mice by Nav1.1-BAC expression increased inhibitory synaptic activity and gamma oscillations and reduced hypersynchrony, memory deficits, and premature mortality. We conclude that reduced Nav1.1 levels and PV cell dysfunction critically contribute to abnormalities in oscillatory rhythms, network synchrony, and memory in hAPP mice and possibly in AD.