Alzheimer's disease (AD) manifests with memory loss and spatial disorientation. AD pathology starts in the entorhinal cortex, making it likely that local neural correlates of spatial navigation, particularly grid cells, are impaired. Grid-cell-like representations in humans can be measured using functional magnetic resonance imaging. We found that young adults at genetic risk for AD (APOE-epsilon 4 carriers) exhibit reduced grid-cell-like representations and altered navigational behavior in a virtual arena. Both changes were associated with impaired spatial memory performance. Reduced grid-cell-like representations were also related to increased hippocampal activity, potentially reflecting compensatory mechanisms that prevent overt spatial memory impairment in APOE-epsilon 4 carriers. Our results provide evidence of behaviorally relevant entorhinal dysfunction in humans at genetic risk for AD, decades before potential disease onset.