Alzheimer’s disease (AD) is the most common form of dementia with no known cause and cure. Research suggests that a reduction of GABAergic inhibitory interneurons’ activity in the hippocampus by beta-amyloid peptide (Aβ) is a crucial trigger for cognitive impairment in AD via hyperexcitability. Therefore, enhancing hippocampal inhibition is thought to be protective against AD. However, hippocampal inhibitory cells are highly diverse, and these distinct interneuron subtypes differentially regulate hippocampal inhibitory circuits and cognitive processes. Moreover, Aβ unlikely affects all subtypes of inhibitory interneurons in the hippocampus equally. Hence, identifying the affected interneuron subtypes in AD to enhance hippocampal inhibition optimally is conceptually and practically challenging. We have previously found that Aβ selectively binds to two of the three major hippocampal nicotinic acetylcholine receptor (nAChR) subtypes, α7- and α4β2-nAChRs, but not α3β4-nAChRs, and inhibits these two receptors in cultured hippocampal inhibitory interneurons to decrease their activity, leading to hyperexcitation and synaptic dysfunction in excitatory neurons. We have also revealed that co-activation of α7- and α4β2-nAChRs is required to reverse the Aβ-induced adverse effects in hippocampal excitatory neurons. Here, we discover that α7- and α4β2-nAChRs predominantly control the nicotinic cholinergic signaling and neuronal activity in hippocampal parvalbumin-positive (PV+) and somatostatin-positive (SST+) inhibitory interneurons, respectively. Furthermore, we reveal that co-activation of these receptors is necessary to reverse hippocampal network dysfunction and fear memory loss in the amyloid pathology model mice. We thus suggest that co-activation of PV+ and SST+ cells is a novel strategy to reverse hippocampal dysfunction and cognitive decline in AD.