Nuclear receptor corepressor 1 (NCOR1) and NCOR2 (also known as SMRT) regulate gene expression by activating histone deacetylase 3 through their deacetylase activation domain (DAD). We show that mice with DAD knock-in mutations have memory deficits, reduced anxiety levels, and reduced social interactions. Mice with NCOR1 and NORC2 depletion specifically in GABAergic neurons (NS-V mice) recapitulated the memory deficits and had reduced GABAA receptor subunit α2 (GABRA2) expression in lateral hypothalamus GABAergic (LHGABA) neurons. This was associated with LHGABA neuron hyperexcitability and impaired hippocampal long-term potentiation, through a monosynaptic LHGABA to CA3GABA projection. Optogenetic activation of this projection caused memory deficits, whereas targeted manipulation of LHGABA or CA3GABA neuron activity reversed memory deficits in NS-V mice. We describe de novo variants in NCOR1, NCOR2 or HDAC3 in patients with intellectual disability or neurodevelopmental disorders. These findings identify a hypothalamus-hippocampus projection that may link endocrine signals with synaptic plasticity through NCOR-mediated regulation of GABA signaling.