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Summary Dysregulated homeostasis of neural activity has been hypothesized to drive Alzheimer’s disease (AD) pathogenesis. AD begins with a decades-long presymptomatic phase, but whether homeostatic mechanisms already begin failing during this silent phase is unknown. We show that before the onset of memory decline and sleep disturbances, familial AD (fAD) model mice display no deficits in CA1 mean firing rate (MFR) during active wakefulness. However, homeostatic down-regulation of CA1 MFR is disrupted during non-rapid eye movement (NREM) sleep and general anesthesia in fAD mouse models. The resultant hyperexcitability is attenuated by the mitochondrial dihydroorotate dehydrogenase (DHODH) enzyme inhibitor, which tunes MFR toward lower set-point values. Ex vivo fAD mutations impair downward MFR homeostasis, resulting in pathological MFR set points in response to anesthetic drug and inhibition blockade. Thus, firing rate dyshomeostasis of hippocampal circuits is masked during active wakefulness but surfaces during low-arousal brain states, representing an early failure of the silent disease stage., Graphical abstract, Highlights • CA1 firing rates are similar between WT and fAD model mice in active wakefulness • Down-regulation of CA1 firing rates by NREM sleep and anesthesia fails in fAD mice • fAD mutations impair stabilization of lower firing rate set points by anesthetics • DHODH inhibition suppresses CA1 hyperexcitability under anesthesia in fAD mice, Zarhin et al. show that firing rate dyshomeostasis is masked during active wakefulness but surfaces during anesthesia and NREM sleep in hippocampal circuits, preceding global sleep and memory disturbances in a mouse model of familial Alzheimer’s disease.