Western diet (WD) consumption during development yields long-lasting memory impairments, yet the underlying neurobiological mechanisms remain elusive. Here we developed an early life WD rodent model to evaluate whether dysregulated hippocampus (HPC) acetylcholine (ACh) signaling, a pathology associated with memory impairment in human dementia, is causally-related to WD-induced cognitive impairment. Rats received a cafeteria-style WD (access to various high-fat/high-sugar foods; CAF) or healthy chow (CTL) during the juvenile and adolescent periods (postnatal days 26-56). Behavioral, metabolic, and microbiome assessments were performed both before and after a 30-day healthy diet intervention beginning at early adulthood. Results revealed CAF-induced HPC-dependent contextual episodic memory impairments that persisted despite healthy diet intervention, whereas CAF was not associated with long-term changes in body weight, body composition, glucose tolerance, anxiety-like behavior, or gut microbiome. HPC immunoblot analyses after the healthy diet intervention identified reduced levels of vesicular ACh transporter in CAF vs. CTL rats, indicative of chronically reduced HPC ACh tone. To determine whether these changes were functionally related to memory impairments, we evaluated temporal HPC ACh binding via ACh-sensing fluorescent reporter in vivo fiber photometry during memory testing, as well as whether the memory impairments could be rescued pharmacologically. Results revealed dynamic HPC ACh binding during object-contextual novelty recognition was highly predictive of memory performance and was disrupted in CAF vs. CTL rats. Further, HPC alpha-7 nicotinic receptor agonist infusion during consolidation rescued memory deficits in CAF rats. Overall, these findings identify dysregulated HPC ACh signaling as a mechanism underlying early life WD-associated memory impairments.