Significance A longstanding question in the field of the neurobiology of learning and memory is why some aged individuals perform comparably to young adults in learning and memory tasks, whereas others show impairments that resemble the performance of those with hippocampal damage. Answers to this question have been critical for advancing our understanding of, and our ability to treat, aging-related cognitive impairments. Here, we have exploited the exquisite organization of the hippocampal circuit to reveal that “unsuccessful” cognitive aging is associated with a breakdown of young adult-like circuit organization, and provide a remarkably straightforward potential cellular substrate for the well-documented dysfunction in neuronal encoding of hippocampal CA1 and CA3 pyramidal neurons in aged learning-impaired rats.