Sensory hypersensitivity is a common and debilitating feature of neurodevelopmental disorders such as Fragile X Syndrome (FXS). How developmental changes in neuronal function culminate in network dysfunction that underlies sensory hypersensitivities is unknown. By systematically studying cellular and synaptic properties of layer 4 neurons combined with cellular and network simulations, we explored how the array of phenotypes in Fmr1-knockout (KO) mice produce circuit pathology during development. We show that many of the cellular and synaptic pathologies in Fmr1-KO mice are antagonistic, mitigating circuit dysfunction, and hence may be compensatory to the primary pathology. Overall, the layer 4 network in the Fmr1-KO exhibits significant alterations in spike output in response to thalamocortical input and distorted sensory encoding. This developmental loss of layer 4 sensory encoding precision would contribute to subsequent developmental alterations in layer 4-to-layer 2/3 connectivity and plasticity observed in Fmr1-KO mice, and circuit dysfunction underlying sensory hypersensitivity.