Mesial temporal lobe epilepsy (mTLE) is one of the most common forms of epilepsy, characterized by hippocampal sclerosis and memory deficits. Injection of kainic acid (KA) into the dorsal hippocampus of mice reproduces major electrophysiological and histopathological characteristics of mTLE. In extracellular recordings from the morphologically intact ventral hippocampus of KA-injected epileptic mice, we found that theta-frequency oscillations were abolished, whereas gamma oscillations persisted both in vivo and in vitro. Whole-cell recordings further showed that oriens-lacunosum-moleculare (O-LM) interneurons, key players in the generation of theta rhythm, displayed marked changes in their intrinsic and synaptic properties. Hyperpolarization-activated mixed cation currents (Ih) were significantly reduced, resulting in an increase in the input resistance and a hyperpolarizing shift in the resting membrane potential. Additionally, the frequency of spontaneous excitatory postsynaptic currents (sEPSCs) was increased, indicating a stronger excitatory input to these neurons. As a consequence, O-LM interneurons increased their firing rate from theta to gamma frequencies during induced network activity in acute slices from KA-injected mice. Thus, our physiological data together with network simulations suggest that changes in excitatory input and synaptic integration in O-LM interneurons lead to impaired rhythmogenesis in the hippocampus that in turn may underlie memory deficit.