Cognitive impairment (CI), a debilitating and pervasive feature of multiple sclerosis (MS), is correlated with hippocampal atrophy. Findings from postmortem MS hippocampi indicate that expression of genes involved in both excitatory and inhibitory neurotransmission are altered in MS, and although deficits in excitatory neurotransmission have been reported in the MS model experimental autoimmune encephalomyelitis (EAE), the functional consequence of altered inhibitory neurotransmission remains poorly understood. In this study, we used electrophysiological and biochemical techniques to examine inhibitory neurotransmission in the CA1 region of the hippocampus in EAE. We find that tonic, GABAergic inhibition is enhanced in CA1 pyramidal cells from EAE mice. Although plasma membrane expression of the GABA transporter GAT-3 was decreased in the EAE hippocampus, an increased surface expression of 5 subunit-containing GABAA receptors appears to be primarily responsible for the increase in tonic inhibition during EAE. Enhanced tonic inhibition during EAE was associated with decreased CA1 pyramidal cell excitability and inhibition of 5 subunit-containing GABAA receptors with the negative allosteric modulator L-655,708 enhanced pyramidal cell excitability in EAE mice. Together, our results suggest that altered GABAergic neurotransmission may underlie deficits in hippocampus-dependent cognitive function in EAE and MS. Copyright 2018. Published by Elsevier Ltd.