Alzheimer's disease (AD) is a progressive neurodegenerative disease observed with aging that represents the most common form of dementia. To date, therapies targeting end-stage disease plaques, tangles, or inflammation have limited efficacy. Therefore, we set out to identify a potential earlier targetable phenotype. Utilizing a mouse model of AD and human fetal cells harboring mutant amyloid precursor protein, we show cell intrinsic neural precursor cell (NPC) dysfunction precedes widespread inflammation and amyloid plaque pathology, making it the earliest defect in the evolution of the disease. We demonstrate that reversing impaired NPC self-renewal via genetic reduction of USP16, a histone modifier and critical physiological antagonist of the Polycomb Repressor Complex 1, can prevent downstream cognitive defects and decrease astrogliosis in vivo. Reduction of USP16 led to decreased expression of senescence gene Cdkn2a and mitigated aberrant regulation of the Bone Morphogenetic Signaling (BMP) pathway, a previously unknown function of USP16. Thus, we reveal USP16 as a novel target in an AD model that can both ameliorate the NPC defect and rescue memory and learning through its regulation of both Cdkn2a and BMP signaling.