Background Although major depressive disorder (MDD) has low heritability, a genome-wide association study in humans has recently implicated type 3 adenylyl cyclase (AC3, ADCY3) in MDD. Moreover, the expression level of AC3 in blood has been considered as a MDD biomarker in humans, but there is lack of supporting evidence from animal study. Methods We employed multiple approaches to experimentally evaluate if AC3 is a contributing factor for major depression using mouse models lacking Adcy3 gene. Results We found that conventional AC3 KO mice exhibited phenotypes associated with MDD in behavioral assays. Electroencephalography/electromyography (EEG/EMG) recordings indicated that AC3 KO mice also have altered sleep patterns characterized by increased percentage of REM sleep. Sholl analysis revealed that cultured cortical neurons from AC3 KO mice have reduced dendritic arborization. Furthermore, synaptic activity at CA3-CA1 synapses was significantly lower in KO mice and they also exhibited attenuated long-term potentiation as well as deficits in spatial navigation. To confirm that theses defects are not secondary responses to anosmia or developmental defects, we generated a conditional AC3 floxed mouse strain. This enabled us to inactivate AC3 function selectively in the forebrain and to inducibly ablate it in adult mice. Both AC3 forebrain-specific and AC3 inducible knockout mice exhibited pro-depression phenotypes without anosmia. Conclusion This study demonstrates that loss of AC3 in mice leads to decreased neuronal activity, altered sleep pattern, and depression-like behaviors, providing strong evidence supporting AC3 as a candidate gene for MDD.