Decades of research into the function of the medial temporal lobe has driven curiosity around clinical outcomes associated with hippocampal dysfunction, including psychosis. Post-mortem analyses of brain tissue from human schizophrenia brain show decreased expression of the NMDAR subunit GluN1 confined to the dentate gyrus with evidence of downstream hippocampal hyperactivity in CA3 and CA1. Little is known about the mechanisms of the emergence of hippocampal hyperactivity as a putative psychosis biomarker. We have developed a reverse-translation mouse to study critical neural features. We had previously studied a dentate gyrus (DG)-specific GluN1 KO, which displays hippocampal hyperactivity and a psychosis-relevant behavioral phenotype. Here, we expressed an inhibitory DREADD (pAAV-CaMKIIa-hM4D(Gi)-mCherry) in granule cells of the mouse dentate gyrus, and continuously inhibited the region for 21 days in adolescent (6 weeks) and adult (10 weeks) C57BL/6 J mice with DREADD agonist Compound 21 (C21). Following this period, we quantified activity in the hippocampal subfields by assessing cFos expression, hippocampally mediated behaviors, and hippocampal local field potential with an intracerebral probe with continual monitoring over time. DG inhibition during adolescence generates an increase in hippocampal activity in CA3 and CA1, impairs social cognition and spatial working memory, as well as shows evidence of increased activity in local field potentials as spontaneous synchronous bursts of activity, which we term hyper-synchronous events (HSEs) in hippocampus. The same DG inhibition delivered during adulthood in the mouse lacks these outcomes. These results suggest a sensitive period in development in which the hippocampus is susceptible to DG inhibition resulting in hippocampal hyperactivity and psychosis-like behavioral outcomes.