Amyloid precursor protein transgenic mice modeling Alzheimer's disease display frequent occurrence of seizures peaking at an age when amyloid plaques start to form in the cortex and hippocampus. We tested the hypothesis that numerous reported interactions of amyloid-β with cell surface molecules result in altered excitation-inhibition balance in brain-wide neural networks, eventually leading to epileptogenesis. We examined electroencephalograms (EEGs) and auditory-evoked potentials (AEPs) in freely moving 4-month-old APPswe/PS1dE9 (APdE9) and wild-type (WT) control mice in the hippocampus, cerebral cortex, and thalamus during movement, quiet waking, non-rapid eye movement sleep, and rapid eye movement (REM) sleep. Cortical EEG power was higher in APdE9 mice than in WT mice over a broad frequency range (5-100 Hz) and during all 4 behavioral states. Thalamic EEG power was also increased but in a narrower range (10-80 Hz). Furthermore, APdE9 mice displayed augmented cortical and thalamic AEPs. While power and theta-gamma modulation were preserved in the APdE9 hippocampus, REM sleep-related phase shift of theta-gamma modulation was altered. Our data suggest that at the early stage of amyloid pathology, cortical principal cells become hyperexcitable and via extensive cortico-thalamic connection drive thalamic cells. Minor hippocampal changes are most likely secondary to abnormal entorhinal input.