Aims: Synaptic dysfunction in Parkinson's disease is caused by propagation of pathogenic α‐synuclein between neurons. Previously, in multiple system atrophy (MSA), pathologically characterised by ectopic deposition of abnormal α‐synuclein predominantly in oligodendrocytes, we demonstrated that the occurrence of memory impairment was associated with the number of α‐synuclein‐positive neuronal cytoplasmic inclusions (NCIs) in the hippocampus. In the present study, we aimed to investigate how abnormal α‐synuclein in the hippocampus can lead to memory impairment. Methods: We performed pathological and biochemical analyses using a mouse model of adult‐onset MSA and human cases (MSA, N = 25; Parkinson's disease, N = 3; Alzheimer's disease, N = 2; normal controls, N = 11). In addition, the MSA model mice were examined behaviourally and physiologically. Results: In the MSA model, inducible human α‐synuclein was first expressed in oligodendrocytes and subsequently accumulated in the cytoplasm of excitatory hippocampal neurons (NCI‐like structures) and their presynaptic nerve terminals with the development of memory impairment. α‐Synuclein oligomers increased simultaneously in the hippocampus of the MSA model. Hippocampal dendritic spines also decreased in number, followed by suppression of long‐term potentiation. Consistent with these findings obtained in the MSA model, post‐mortem analysis of human MSA brain tissues showed that cases of MSA with memory impairment developed more NCIs in excitatory hippocampal neurons along with α‐synuclein oligomers than those without. Conclusions: Our results provide new insights into the role of α‐synuclein oligomers as a possible pathological cause of memory impairment in MSA. [ABSTRACT FROM AUTHOR]