The ability to distinguish between similar experiences is a critical feature of episodic memory and is primarily regulated by the dentate gyrus (DG) region of the hippocampus. However, the molecular mechanisms underlying such pattern separation tasks are poorly understood. We report a novel role for the small GTPase ADP ribosylation factor 4 (Arf4) in controlling pattern separation by regulating dendritic spine development. Arf4(+/-) mice at 4-5 months of age display severe impairments in a pattern separation task, as well as significant dendritic spine loss and smaller miniature excitatory post-synaptic currents (mEPSCs) in granule cells of the DG. Arf4 knockdown also decreases spine density in primary neurons, whereas Arf4 overexpression promotes spine development. A constitutively active form of Arf4, Arf4-Q71L, promotes spine density to an even greater extent than wildtype Arf4, whereas the inactive Arf4-T31N mutant does not increase spine density relative to controls. Arf4's effects on spine development are regulated by ASAP1, a GTPase-activating protein that modulates Arf4 GTPase activity. ASAP1 overexpression decreases spine density, and this effect is partially rescued by concomitant overexpression of wildtype Arf4 or Arf4-Q71L. In addition, Arf4 overexpression rescues spine loss in primary neurons from an Alzheimer's disease-related apolipoprotein (apo) E4 mouse model. Our findings suggest that Arf4 is a critical modulator of DG-mediated pattern separation by regulating dendritic spine development.