Electroencephalogram (EEG) recordings in Fragile X syndrome (FXS) patients have revealed enhanced sensory responses, enhanced resting “gamma frequency” (30–100 Hz) activity, and a decreased ability for sensory stimuli to modulate cortical activity at gamma frequencies. Similar changes are observed in the FXS model mouse – the Fmr1 knockout. These alterations may become effective biomarkers for diagnosis and treatment of FXS. Therefore, it is critical to better understand what circuit properties underlie these changes. We employed Channelrhodopsin2 to optically activate local circuits in the auditory cortical region in brain slices to examine how changes in local circuit function may be related to EEG changes. We focused on layers 2/3 and 5 (L2/3 and L5). In Fmr1 knockout mice, light-driven excitation of L2/3 revealed hyperexcitability and increased gamma frequency power in both local L2/3 and L5 circuits. Moreover, there is increased synchrony in the gamma frequency band between L2/3 and L5. Hyperexcitability and increased gamma power were not observed in L5 with L5 light-driven excitation, indicating that these changes were layer-specific. A component of L2/3 network hyperexcitability is independent of ionotropic receptor mediated synaptic transmission and may be mediated by increased intrinsic excitability of L2/3 neurons. Finally, lovastatin, a candidate therapeutic compound for FXS that targets ERK signaling did not normalize changes in gamma activity. In conclusion, hyperactivity and increased gamma activity in local neocortical circuits, together with increased gamma synchrony between circuits, provide a putative substrate for EEG alterations observed in both FXS patients and the FXS mouse model.