Apolipoprotein (apo) E, a polymorphic protein with three isoforms (apoE2, apoE3, and apoE4), is essential for lipid homeostasis. Carriers of apoE4 are at higher risk for developing Alzheimer's disease. We have investigated adult neurogenesis in mice with knockout (KO) for apoE or with knockin (KI) alleles for human apoE3 or apoE4, and we report that neurogenesis is reduced in both apoE-KO and apoE4-KI mice. In apoE-KO mice, increased BMP signaling promoted glial differentiation at the expense of neurogenesis. In contrast, in apoE4-KI mice, presynaptic GABAergic input-mediated maturation of newborn neurons was diminished. Tau phosphorylation, an Alzheimer's disease characteristic, and levels of neurotoxic apoE fragments were both elevated in apoE4-KI hippocampal neurons concomitant with decreased GABAergic interneuron survival. Potentiating GABAergic signaling restored neuronal maturation and neurogenesis in apoE4-KI mice to normal levels. These findings suggest that GABAergic signaling can be targeted to mitigate the deleterious effects of apoE4 on neurogenesis.