Neurotransmitter release from presynaptic terminals is primarily regulated by rapid Ca2+ influx through membrane-resident voltage-gated Ca2+ channels (VGCCs). Also, accumulating evidence indicates that the endoplasmic reticulum (ER) is extensively present in axonal terminals of neurons and plays a modulatory role in synaptic transmission by regulating Ca2+ levels. Alzheimer’s disease (AD) is marked by enhanced Ca2+ release from the ER and downregulation of Ca2+ buffering proteins. However, the precise consequence of impaired Ca2+ signalling within the vicinity of VGCCs (active zone (AZ)) on exocytosis is poorly understood. Here, we perform in-silico experiments of intracellular Ca2+ signalling and exocytosis in a detailed biophysical model of hippocampal synapses to investigate the effect of aberrant Ca2+ signalling on neurotransmitter release in AD. Our model predicts that enhanced Ca2+ release from the ER increases the probability of neurotransmitter release in AD. Moreover, over very short timescales (30-60 msec), the model exhibits activity-dependent and enhanced short-term plasticity in AD, indicating neuronal hyperactivity—a hallmark of the disease. Similar to previous observations in AD animal models, our model reveals that during prolonged stimulation (~450 msec), pathological Ca2+ signalling increases depression and desynchronization with stimulus, causing affected synapses to operate unreliably. Overall, our work provides direct evidence in support of a crucial role played by altered Ca2+ homeostasis mediated by intracellular stores in AD.