The mounting of appropriate emotional and neuroendocrine responses to environmental stressors critically depend on the hypothalamic pituitary adrenal (HPA) axis and associated limbic circuitry. Although its function is currently unknown, the highly evolutionarily conserved Transmembrane Protein 35 (TMEM35) is prominently expressed in HPA circuitry and limbic areas including the hippocampus and amygdala. To investigate the possible involvement of this protein in neuroendocrine function, we generated tmem35 knockout (KO) mice to characterize the endocrine, behavioral, electrophysiological, and proteomic alterations caused by deletion of the tmem35 gene. While capable of mounting a normal corticosterone response to restraint stress, KO mice showed elevated basal corticosterone accompanied by increased anxiety-like behavior. The KO mice also displayed impairment of hippocampus-dependent fear and spatial memories. Given the intact memory acquisition but a deficit in memory retention in the KO mice, TMEM35 is likely required for long-term memory consolidation. This conclusion is further supported by a loss of long-term potentiation in the Schaffer collateral-CA1 pathway in the KO mice. To identify putative molecular pathways underlying alterations in plasticity, proteomic analysis of synaptosomal proteins revealed lower levels of postsynaptic molecules important for synaptic plasticity in the KO hippocampus, including PSD95 and NMDA receptors. Pathway analysis (Ingenuity Pathway Analysis®) of differentially expressed synaptic proteins in tmem35 KO hippocampus implicated molecular networks associated with specific cellular and behavioral functions, including decreased LTP, and increased startle reactivity and locomotion. Collectively, these data suggest that TMEM35 is a novel factor required for normal activity of the HPA axis and limbic circuitry.