The mechanisms by which neonatal inflammation leads to cognitive deficits in adulthood remain poorly understood. Inhibitory GABAergic synaptic transmission plays a vital role in controlling learning, memory and synaptic plasticity. Since early-life inflammation has been reported to adversely affect the GABAergic synaptic transmission, the aim of this study was to investigate whether and how neonatal inflammation affects GABAergic synaptic transmission resulting in cognitive impairment. Neonatal mice received a daily subcutaneous injection of lipopolysaccharide (LPS, 50 μg/kg) or saline on postnatal days 3-5. It was found that blocking GABAergic synaptic transmission reversed the deficit in hippocampus-dependent memory or the induction failure of long-term potentiation in the dorsal CA1 in adult LPS mice. An increase of mIPSCs amplitude was further detected in adult LPS mice indicative of postsynaptic potentiation of GABAergic transmission. Additionally, neonatal LPS resulted in the increased expression and function of K-Cl-cotransporter 2 (KCC2) and the decreased expression of transforming growth factor-beta 1 (TGF-β1) in the dorsal CA1 during adulthood. The local TGF-β1 overexpression improved KCC2 expression and function, synaptic plasticity and memory of adult LPS mice. Adult LPS mice show hypermethylation of TGFb1 promoter and negatively correlate with reduced TGF-β1 transcripts. 5-Aza-deoxycytidine restored the changes in TGFb1 promoter methylation and TGF-β1 expression. Altogether, the results suggest that hypermethylation-induced reduction of TGF-β1 leads to enhanced GABAergic synaptic inhibition through increased KCC2 expression, which is a underlying mechanism of neonatal inflammation-induced hippocampus-dependent memory impairment in adult mice.