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Background: Abnormal accumulation of amyloid β 1-42 oligomers (AβO 1-42), a hallmark of Alzheimer's disease, impairs hippocampal theta-nested gamma oscillations and long-term potentiation (LTP) that are believed to underlie learning and memory. Parvalbumin-positive (PV) and somatostatin-positive (SST) interneurons are critically involved in theta-nested gamma oscillogenesis and LTP induction. However, how AβO 1-42 affects PV and SST interneuron circuits is unclear. Through optogenetic manipulation of PV and SST interneurons and computational modeling of the hippocampal neural circuits, we dissected the contributions of PV and SST interneuron circuit dysfunctions on AβO 1-42-induced impairments of hippocampal theta-nested gamma oscillations and oscillation-induced LTP. Results: Targeted whole-cell patch-clamp recordings and optogenetic manipulations of PV and SST interneurons during in vivo-like, optogenetically induced theta-nested gamma oscillations in vitro revealed that AβO 1-42 causes synapse-specific dysfunction in PV and SST interneurons. AβO 1-42 selectively disrupted CA1 pyramidal cells (PC)-to-PV interneuron and PV-to-PC synapses to impair theta-nested gamma oscillogenesis. In contrast, while having no effect on PC-to-SST or SST-to-PC synapses, AβO 1-42 selectively disrupted SST interneuron-mediated disinhibition to CA1 PC to impair theta-nested gamma oscillation-induced spike timing-dependent LTP (tLTP). Such AβO 1-42-induced impairments of gamma oscillogenesis and oscillation-induced tLTP were fully restored by optogenetic activation of PV and SST interneurons, respectively, further supporting synapse-specific dysfunctions in PV and SST interneurons. Finally, computational modeling of hippocampal neural circuits including CA1 PC, PV, and SST interneurons confirmed the experimental observations and further revealed distinct functional roles of PV and SST interneurons in theta-nested gamma oscillations and tLTP induction. Conclusions: Our results reveal that AβO 1-42 causes synapse-specific dysfunctions in PV and SST interneurons and that optogenetic modulations of these interneurons present potential therapeutic targets for restoring hippocampal network oscillations and synaptic plasticity impairments in Alzheimer's disease.