Several neuropsychiatric disorders are associated with cognitive and social dysfunction. Postmortem studies of patients with schizophrenia have revealed specific changes in area CA2, a long-overlooked region of the hippocampus recently found to be critical for social memory formation. To examine how area CA2 is altered in psychiatric illness, we used the Df(16)A^+/− mouse model of the 22q11.2 microdeletion, a genetic risk factor for developing several neuropsychiatric disorders, including schizophrenia. We report several age-dependent CA2 alterations: a decrease in the density of parvalbumin-expressing interneurons, a reduction in the amount of feedforward inhibition, and a change in CA2 pyramidal-neuron intrinsic properties. Furthermore, we found that area CA2 is less plastic in Df(16)A^+/− mice, making it nearly impossible to evoke action potential firing in CA2 pyramidal neurons. Finally, we show that Df(16)A^+/− mice display impaired social cognition, providing a potential mechanism and a neural substrate for this impairment in psychiatric disorders.