Alzheimer’s disease (AD) is a neurodegenerative disease that disproportionately impacts memory and the hippocampus. However, it is unclear how AD pathology influences the activity of surviving neurons in the hippocampus to contribute to the memory symptoms in AD. One well-understood connection between spatial memory and neuronal activity in healthy brains is the activity of place cells, neurons in the hippocampus that fire preferentially in a specific location of a given environment (the place field of the place cell). In the present study, place cells were recorded from the hippocampus in a recently-developed rat model of AD (Tg-F344 AD) at an age (12–20 months) at which the AD rats showed marked spatial memory deficits. Place cells in the CA2 and CA3 pyramidal regions of the hippocampus in AD rats showed sharply reduced spatial fidelity relative to wild-type (WT) rats. In contrast, spiking activity of place cells recorded in region CA1 in AD rats showed good spatial fidelity that was similar to CA1 place cells in WT rats. Oral administration of the M(1) muscarinic acetylcholine receptor agonist VU0364572 impacted place cell firing rates in CA1 and CA2/3 hippocampal regions but did not improve the spatial fidelity of CA2/3 hippocampal place cells in AD rats. The results indicated that, to the extent the spatial memory impairment in AD rats was attributable to hippocampal dysfunction, the memory impairment was more attributable to dysfunction in hippocampal regions CA2 and CA3 rather than CA1.