Adult neurogenesis regulates plasticity and function in the hippocampus, which is critical for memory and vulnerable to Alzheimer's disease (AD). Promoting neurogenesis may improve hippocampal function in AD brains. However, how amyloid beta (Abeta), the key AD pathogen, affects the development and function of adult-born neurons remains unknown. Adult-born granule cells (GCs) in human amyloid precursor protein (hAPP) transgenic mice, an AD model, showed greater dendritic length, spine density, and functional responses than did controls early in development, but were impaired morphologically and functionally during later maturation. Early inhibition of GABA(A) receptors to suppress GABAergic signaling or late inhibition of calcineurin to enhance glutamatergic signaling normalized the development of adult-born GCs in hAPP mice with high Abeta levels. Abeta-induced increases in GABAergic neurotransmission or an imbalance between GABAergic and glutamatergic neurotransmission may contribute to impaired neurogenesis in AD.