The unique vulnerability of the olfactory system to Alzheimer's disease (AD) provides a quintessential translational tool for understanding mechanisms of synaptic dysfunction and pathological progression in the disease. Using the Tg2576 mouse model of β-amyloidosis, we show that aberrant, hyperactive olfactory network activity begins early in life, before detectable behavioral impairments or comparable hippocampal dysfunction and at a time when amyloid-β (Aβ) deposition is restricted to the olfactory bulb (OB). Hyperactive odor-evoked activity in the piriform cortex (PCX) and increased OB-PCX functional connectivity emerged at a time coinciding with olfactory behavior impairments. This hyperactive activity persisted until later in life when the network converted to a hyporesponsive state. This conversion was Aβ-dependent, because liver-X receptor agonist treatment to promote Aβ degradation rescued the hyporesponsive state and olfactory behavior. These data lend evidence to a novel working model of olfactory dysfunction in AD and, complimentary to other recent works, suggest that disease-relevant network dysfunction is highly dynamic and region specific, yet with lasting effects on cognition and behavior.