Age-related deficits in episodic memory result, in part, from declines in the integrity of medial temporal lobe structures, such as the hippocampus, but are not thought to be due to widespread loss of principal neurons. Studies in rodents suggest, however, that inhibitory interneurons may be particularly vulnerable in advanced age. Optimal encoding and retrieval of information depend on a balance of excitatory and inhibitory transmission. It is not known whether a disruption of this balance is observed in aging non-human primates, and whether such changes affect network function and behavior. To examine this question, we combine large-scale electrophysiological recordings with cell-type-specific imaging in the medial temporal lobe of cognitively assessed, aged rhesus macaques. We found that neuron excitability in the hippocampal region CA3 is negatively correlated with the density of somatostatin-expressing inhibitory interneurons in the vicinity of the recording electrodes in the stratum oriens. By contrast, no hyperexcitability or interneuron loss was observed in the perirhinal cortex of these aged, memory-impaired monkeys. These data provide a link, for the first time, between selective increases in principal cell excitability and declines in a molecularly defined population of interneurons that regulate network inhibition.