Humans and animals form internal representations of external space based on their own body movement (dead reckoning) as well as external landmarks. It is poorly understood, however, how different types of information are integrated to form a unified representation of external space. To examine the role of dentate gyrus (DG) in this process, we conducted physiological and behavioral experiments using Bax knockout (Bax-KO) mice in which newly generated granule cells continue to accumulate disrupting neural circuitry specifically in the DG. Unlike in wild-type (WT) littermates, spatial firing of hippocampal neurons was completely dissociated from a distinct visual cue and instead, tended to stay constant relative to the recording room in Bax-KO mice. Behaviorally, whereas spatial learning was intact in conventional spatial reference memory tasks, Bax-KO mice were impaired in finding a target location based on visual landmarks when target locations predicted by dead reckoning and visual landmarks were made incongruent. These results provide converging evidence for the role of DG in binding animal's internal spatial map with the sensory information on external landmarks in building a distinct spatial representation for each environment.