Memory disruption in mild cognitive impairment (MCI) and Alzheimer's disease (AD) is poorly understood, particularly at early stages prior to neuronal or synaptic degeneration. In mouse models of AD, there are observed disruptions to sharp wave ripples (SWRs), hippocampal population events with a critical role in memory consolidation. However, the micro-circuitry underlying these disruptions are under-explored. We tested the hypothesis that a selective reduction in parvalbumin-expressing (PV) inhibitory interneuron activity underlies hyperactivity and SWR disruption. We employed the 5xFAD model of familial Alzheimer's disease crossed with mouse lines that selectively label excitatory pyramidal cells (PCs) and inhibitory PV cells. We observed a 33% increase in frequency, 58% increase in amplitude, and 8% decrease in duration of SWRs in acute slices from 3-month 5xFAD mice versus littermate controls. 5xFAD mice of the same age were impaired in a task of hippocampal-dependent memory. Concurrent with SWR recordings, we performed calcium imaging, cell-attached, and whole-cell recordings of PC and PV cells within the CA1 region. PCs in 5xFAD mice participated in enlarged ensembles, with similar spiking activity, and increased synaptic E/I ratio, suggesting a disinhibitory mechanism. In contrast, we observed a selective 46% spike rate reduction during SWRs in PV basket cells (PVBCs), whereas PV bistratified and PV axo-axonic cells were unimpaired. Excitatory synaptic drive to PVBCs was selectively reduced by 50%, resulting in decreased E/I ratio. Considering prior studies of intrinsic PV cell dysfunction in AD, these findings suggest synaptic and network mechanisms also play a prominent role.