Apolipoprotein E4 (apoE4) is the major genetic risk factor for Alzheimer's disease. However, the underlying mechanisms are unclear. We found that female apoE4 knock-in (KI) mice had an age-dependent decrease in hilar GABAergic interneurons that correlated with the extent of learning and memory deficits, as determined in the Morris water maze, in aged mice. Treating apoE4-KI mice with daily peritoneal injections of the GABA(A) receptor potentiator pentobarbital at 20 mg/kg for 4 weeks rescued the learning and memory deficits. In neurotoxic apoE4 fragment transgenic mice, hilar GABAergic interneuron loss was even more pronounced and also correlated with the extent of learning and memory deficits. Neurodegeneration and tauopathy occurred earliest in hilar interneurons in apoE4 fragment transgenic mice; eliminating endogenous Tau prevented hilar GABAergic interneuron loss and the learning and memory deficits. The GABA(A) receptor antagonist picrotoxin abolished this rescue, while pentobarbital rescued learning deficits in the presence of endogenous Tau. Thus, apoE4 causes age- and Tau-dependent impairment of hilar GABAergic interneurons, leading to learning and memory deficits in mice. Consequently, reducing Tau and enhancing GABA signaling are potential strategies to treat or prevent apoE4-related Alzheimer's disease.