Synaptopathies contributing to neurodevelopmental disorders are linked to mutations in synaptic organizing molecules, including postsynaptic neuroligins, presynaptic neurexins, and MDGAs, which regulate their interaction. The role of MDGA1 in suppressing inhibitory versus excitatory synapses is controversial based on in vitro studies. We show that genetic deletion of MDGA1 in vivo elevates hippocampal CA1 inhibitory, but not excitatory, synapse density and transmission. Furthermore, MDGA1 is selectively expressed by pyramidal neurons and regulates perisomatic, but not distal dendritic, inhibitory synapses. Mdga1-/- hippocampal networks demonstrate muted responses to neural excitation, and Mdga1-/- mice are resistant to induced seizures. Mdga1-/- mice further demonstrate compromised hippocampal long-term potentiation, consistent with observed deficits in spatial and context-dependent learning and memory. These results suggest that mutations in MDGA1 may contribute to cognitive deficits through altered synaptic transmission and plasticity by loss of suppression of inhibitory synapse development in a subcellular domain- and cell-type-selective manner.