Every 23 s, a person sustains a traumatic brain injury in the United States leaving many patients with substantial cognitive impairment and epilepsy. Injury-induced alterations in the hippocampus underpin many of these disturbances of neurological function. Abnormalities in the dentate gyrus are likely to play a major role in the observed pathophysiology because this subregion functions as a filter impeding excessive or aberrant activity from propagating further into the circuit and following experimental brain injury, the dentate gyrus becomes more excitable. Although alteration in excitation or inhibition could mediate this effect in the dentate gyrus, we show a key role played by an impairment of GABA_Aergic inhibition. The efficacy of GABA_A-mediated inhibition depends on a low [Cl⁻]_i that is maintained by neuronal K–Cl co-transporter 2 (KCC2). Using fluid percussion injury (FPI) in the mouse, we demonstrate significant reductions in KCC2 protein and mRNA expression in the dentate gyrus that causes a depolarizing shift in GABA_A reversal potential, due to impaired chloride clearance, resulting in reduced inhibitory efficiency. This study elucidates a novel mechanism underlying diminished dentate gyrus inhibitory efficacy and provides an innovative target for the development of potential therapeutics to restore the severe pathological consequences of traumatic brain injury.