Synaptic plasticity is the ability of synapses to modulate the strength of neuronal connections; however, the molecular factors that regulate this feature are incompletely understood. Here, we demonstrated that mice lacking brain-specific angiogenesis inhibitor 1 (BAI1) have severe deficits in hippocampus-dependent spatial learning and memory that are accompanied by enhanced long-term potentiation (LTP), impaired long-term depression (LTD), and a thinning of the postsynaptic density (PSD) at hippocampal synapses. We showed that compared with WT animals, mice lacking Bai1 exhibit reduced protein levels of the canonical PSD component PSD-95 in the brain, which stems from protein destabilization. We determined that BAI1 prevents PSD-95 polyubiquitination and degradation through an interaction with murine double minute 2 (MDM2), the E3 ubiquitin ligase that regulates PSD-95 stability. Restoration of PSD-95 expression in hippocampal neurons in BAI1-deficient mice by viral gene therapy was sufficient to compensate for Bai1 loss and rescued deficits in synaptic plasticity. Together, our results reveal that interaction of BAI1 with MDM2 in the brain modulates PSD-95 levels and thereby regulates synaptic plasticity. Moreover, these results suggest that targeting this pathway has therapeutic potential for a variety of neurological disorders.