Alzheimer's disease (AD) manifests with progressive memory loss and spatial disorientation. Neuropathological studies suggest early AD pathology in the entorhinal cortex (EC) of young adults at genetic risk for AD (APOE epsilon 4-carriers). Because the EC harbors grid cells, a likely neural substrate of path integration (PI), we examined PI performance in APOE epsilon 4-carriers during a virtual navigation task. We report a selective impairment in APOE epsilon 4-carriers specifically when recruitment of compensatory navigational strategies via supportive spatial cues was disabled. A separate fMRI study revealed that PI performance was associated with the strength of entorhinal grid-like representations when no compensatory strategies were available, suggesting grid cell dysfunction as a mechanistic explanation for PI deficits in APOE epsilon 4-carriers. Furthermore, posterior cingulate/retrosplenial cortex was involved in the recruitment of compensatory navigational strategies via supportive spatial cues. Our results provide evidence for selective PI deficits in AD risk carriers, decades before potential disease onset.