Glial cells are an integral part of functional communication in the brain. Here we show that astrocytes contribute to the fast dynamics of neural circuits that underlie normal cognitive behaviors. In particular, we found that the selective expression of tetanus neurotoxin (TeNT) in astrocytes significantly reduced the duration of carbachol-induced gamma oscillations in hippocampal slices. These data prompted us to develop a novel transgenic mouse model, specifically with inducible tetanus toxin expression in astrocytes. In this in vivo model, we found evidence of a marked decrease in electroencephalographic (EEG) power in the gamma frequency range in awake-behaving mice, whereas neuronal synaptic activity remained intact. The reduction in cortical gamma oscillations was accompanied by impaired behavioral performance in the novel object recognition test, whereas other forms of memory, including working memory and fear conditioning, remained unchanged. These results support a key role for gamma oscillations in recognition memory. Both EEG alterations and behavioral deficits in novel object recognition were reversed by suppression of tetanus toxin expression. These data reveal an unexpected role for astrocytes as essential contributors to information processing and cognitive behavior.