Epilepsy, characterized by recurrent seizures, affects 1% of the general population. Interestingly, 25% of diabetics develop seizures with a yet unknown mechanism. Hyperglycemia downregulates inwardly rectifying potassium channel 4.1 (Kir4.1) in cultured astrocytes. Therefore, the present study aims to determine if downregulation of functional astrocytic Kir4.1 channels occurs in brains of type 2 diabetic mice and could influence hippocampal neuronal hyperexcitability. Using whole-cell patch clamp recording in hippocampal brain slices from male mice, we determined the electrophysiological properties of stratum radiatum astrocytes and CA1 pyramidal neurons. In diabetic mice, astrocytic Kir4.1 channels were functionally downregulated as evidenced by multiple characteristics including depolarized membrane potential, reduced barium-sensitive Kir currents and impaired potassium uptake capabilities of hippocampal astrocytes. Furthermore, CA1 pyramidal neurons from diabetic mice displayed increased spontaneous activity: action potential frequency was ≈9 times higher in diabetic compared with non-diabetic mice and small EPSC event frequency was significantly higher in CA1 pyramidal cells of diabetics compared to non-diabetics. These differences were apparent in control conditions and largely pronounced in response to the pro-convulsant 4-aminopyridine. Our data suggest that astrocytic dysfunction due to downregulation of Kir4.1 channels may increase seizure susceptibility by impairing astrocytic ability to maintain proper extracellular homeostasis.