CA3 pyramidal neurons (PNs) in the hippocampus are connected by recurrent collateral synapses, forming the largest auto-associative network in the mammalian brain. How the recurrent connectivity between CA3 PNs is established during development remains unclear. To address this question, we made simultaneous patch-clamp recordings of up to eight CA3 PNs in the mouse hippocampus (7600 tested connections in total). Average connectivity in the mouse hippocampus was down-regulated during development, with apparent average connection probability values of 3.63% (P7–8), 2.41% (P18–22), and 0.94% (P45–50; P < 0.0001). Correction for cut axons and dendrites gave higher values: ~5%, ~4% and ~2%, but preserved the differences between developmental time points (P < 0.001), suggesting pruning of synapses in the CA3 network. Analysis of morphological properties of axons of CA3 PNs revealed that dendritic length increased, whereas axon length decreased during development, suggesting that axonal density determines connectivity. These results indicate a developmental transformation from a dense to a sparse network configuration. In parallel to changes in connectivity, unitary synaptic efficacy was downregulated during development. In the young age group, EPSP amplitude was close to threshold for action potential (AP) initiation, whereas in the old age group, ~20 EPSPs were required to trigger spikes. Thus, the network switches from near-detonation to spatiotemporal summation. Taken together, our results demonstrate fundamental changes in connectivity and synaptic integration in the CA3 network during development.