Human neuroimaging studies suggest that aberrant neural connectivity underlies behavioural deficits in autism spectrum disorders (ASDs), but the molecular and neural circuit mechanisms underlying ASDs remain elusive. Here, we describe a complete knockout mouse model of the autism-associated Shank3 gene, with a deletion of exons 4-22 (Δe4-22). Both mGluR5-Homer scaffolds and mGluR5-mediated signalling are selectively altered in striatal neurons. These changes are associated with perturbed function at striatal synapses, abnormal brain morphology, aberrant structural connectivity and ASD-like behaviour. In vivo recording reveals that the cortico-striatal-thalamic circuit is tonically hyperactive in mutants, but becomes hypoactive during social behaviour. Manipulation of mGluR5 activity attenuates excessive grooming and instrumental learning differentially, and rescues impaired striatal synaptic plasticity in Δe4-22(-/-) mice. These findings show that deficiency of Shank3 can impair mGluR5-Homer scaffolding, resulting in cortico-striatal circuit abnormalities that underlie deficits in learning and ASD-like behaviours. These data suggest causal links between genetic, molecular, and circuit mechanisms underlying the pathophysiology of ASDs.