Alzheimer's disease (AD) is a prevalent neurodegenerative condition that can lead to severe cognitive and functional deterioration. Functional magnetic resonance imaging (fMRI) revealed abnormalities in AD in intrinsic synchronization between spatially separate regions in the so-called default mode network (DMN) of the brain. To understand the relationship between this disruption in large-scale synchrony and the cognitive impairment in AD, it is critical to determine whether and how the deficit in the low frequency hemodynamic fluctuations recorded by fMRI translates to much faster timescales of memory and other cognitive processes. The present study employed magnetoencephalography (MEG) and a Hidden Markov Model (HMM) approach to estimate spontaneous synchrony variations in the functional neural networks with high temporal resolution. In a group of cognitively healthy (CH) older adults, we found transient (mean duration of 150–250 ms) network activity states, which were visited in a rapid succession, and were characterized by spatially coordinated changes in the amplitude of source-localized electrophysiological oscillations. The inferred states were similar to those previously observed in younger participants using MEG, and the estimated cortical source distributions of the state-specific activity resembled the classic functional neural networks, such as the DMN. In patients with AD, inferred network states were different from those of the CH group in short-scale timing and oscillatory features. The state of increased oscillatory amplitudes in the regions overlapping the DMN was visited less often in AD and for shorter periods of time, suggesting that spontaneous synchronization in this network was less likely and less stable in the patients. During the visits to this state, in some DMN nodes, the amplitude change in the higher-frequency (8–30 Hz) oscillations was less robust in the AD than CH group. These findings highlight relevance of studying short-scale temporal evolution of spontaneous activity in functional neural networks to understanding the AD pathophysiology. Capacity of flexible intrinsic synchronization in the DMN may be crucial for memory and other higher cognitive functions. Our analysis yielded metrics that quantify distinct features of the neural synchrony disorder in AD and may offer sensitive indicators of the neural network health for future investigations.