Children with Fragile X syndrome (FXS) have deficits of attention and arousal. To begin to identify the neural causes of these deficits, we examined juvenile rats lacking the Fragile X mental retardation protein (FMR-KO) for disruption of cortical activity related to attention and arousal. Specifically, we examined the switching of visual cortex between activated and inactivated states that normally occurs during movement and quiet rest, respectively. In both wild-type and FMR-KO rats, during the third and fourth postnatal weeks cortical activity during periods of movement was dominated by an activated state with prominent 18-52 Hz activity. However, during quiet rest, when activity in wild-type rats became dominated by the inactivated state (3-9 Hz activity), FMR-KO rat cortex abnormally remained activated, resulting in increased high-frequency and reduced low-frequency power during rest. Firing rate correlations revealed reduced synchronization in FMR-KO rats, particularly between fast-spiking interneurons, that developmentally precede cortical state defects. Together our data suggest that disrupted inhibitory connectivity impairs the ability of visual cortex to regulate exit from the activated state in a behaviorally appropriate manner, potentially contributing to disrupted attention and sensory processing observed in children with FXS by making it more difficult to decrease cortical drive by unattended stimuli.