One of the most common forms of dementia is Alzheimer disease (AD). AD is a severe neurodegenerative disorder which causes deficits in cognitive and behavioral abilities. In Alzheimer's disease, the hippocampus is one of the first regions of the brain to suffer damage. Damage to the hippocampus causes cognitive symptoms. Spatial cognition impairment is one of the early symptoms of AD. Generally, AD affects hippocampus role in spatial navigation by deteriorating the ability of hippocampal place cells in maintaining cognitive maps. Place cells are neurons in the hippocampus that fire with a frequency between 30 to 100 HZ whenever the animal is in a particular location in an environment corresponding to the cell's place field. Thus, in this research project we proposed a model for place field formation in CA3 based on different biological facts and observations. Embedding neuron-glia interaction is one the key aspects of the proposed model. This will provide us with an opportunity for further investigations of the role of hippocampal neural circuit dynamics in place field formation under normal and abnormal (neurodegenerative) conditions. We considered the deficits due to AD at cellular scale to investigate the behavior of the proposed model under this condition. Our simulation results demonstrate that the proposed model is able to predict biological observations recorded in the literature for representation of CA3 place cells under AD condition; that is, higher peak firing rate for place cells and larger place fields compared to the normal situations. We may consider these results as a preliminary validation for the proposed model. In the next step, we increased the strength of coupling between neuron and astrocytes and we observed that some impacts of AD were partially compensated, that is the peak firing rate of the place cells was decreased relative to the AD situation. Finally, the model is used to investigate the impact of the AD on spatial navigation in a simulated rodent. Results show that the simulated animal with AD is less successful in finding its path to the goal than a healthy one. Our simulation results also suggest that increasing neuron–astrocyte coupling leads to a better navigation compared to the initial AD conditions. Based on these results, we may conclude that 1) changes in peak firing rates of place cells effects more significantly on the spatial navigation abilities of AD subjects, and 2) the astrocytes could be a proximal target for more studies on the AD.