Synaptic target specificity, whereby neurons make distinct types of synapses with different target cells, is critical for brain function, yet the mechanisms driving it are poorly understood. In this study, we demonstrate Kirrel3 regulates target-specific synapse formation at hippocampal mossy fiber (MF) synapses, which connect dentate granule (DG) neurons to both CA3 and GABAergic neurons. Here, we show Kirrel3 is required for formation of MF filopodia; the structures that give rise to DG-GABA synapses and that regulate feed-forward inhibition of CA3 neurons. Consequently, loss of Kirrel3 robustly increases CA3 neuron activity in developing mice. Alterations in the Kirrel3 gene are repeatedly associated with intellectual disabilities, but the role of Kirrel3 at synapses remained largely unknown. Our findings demonstrate that subtle synaptic changes during development impact circuit function and provide the first insight toward understanding the cellular basis of Kirrel3-dependent neurodevelopmental disorders.