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Nuclear receptor corepressor 1 (NCOR1) and NCOR2 (also known as SMRT) regulate gene expression by activating histone deacetylase 3 through their Deacetylase Activation Domain (DAD). We show that mice with DAD knock-in mutations have memory deficits, reduced anxiety levels, and reduced social interactions. Mice with NCOR1/2 depletion specifically in GABAergic neurons (NS-V mice) recapitulated the memory deficits and had reduced GABRA2 expression in lateral hypothalamus GABAergic neurons (LH GABA ). This was associated with LH GABA neuron hyperexcitability and impaired hippocampal long-term potentiation, through a monosynaptic LH GABA to CA3 GABA projection. Optogenetic activation of this projection caused memory deficits, while targeted manipulation of LH GABA or CA3 GABA neuron activity reversed memory deficits in NS-V mice. We describe de novo variants in NCOR1, NCOR2 or HDAC3 in patients with intellectual disability or neurodevelopmental defects. These findings identify a hypothalamus–hippocampus projection that may link endocrine signals with synaptic plasticity through NCOR-mediated regulation of GABA signaling.