Subanesthetic ketamine evokes rapid and long-lasting antidepressant effects in human patients. The mechanism for ketamine's effects remains elusive, but ketamine may broadly modulate brain plasticity processes. We show that single-dose ketamine reactivates adult mouse visual cortical plasticity and promotes functional recovery of visual acuity defects from amblyopia. Ketamine specifically induces downregulation of neuregulin-1 (NRG1) expression in parvalbumin-expressing (PV) inhibitory neurons in mouse visual cortex. NRG1 downregulation in PV neurons co-tracks both the fast onset and sustained decreases in synaptic inhibition to excitatory neurons, along with reduced synaptic excitation to PV neurons in vitro and in vivo following a single ketamine treatment. These effects are blocked by exogenous NRG1 as well as PV targeted receptor knockout. Thus, ketamine reactivation of adult visual cortical plasticity is mediated through rapid and sustained cortical disinhibition via downregulation of PV-specific NRG1 signaling. Our findings reveal the neural plasticity-based mechanism for ketamine-mediated functional recovery from adult amblyopia.