Stress alters the function of many physiological processes throughout the body, including in the brain. A neural circuit particularly vulnerable to the effects of stress is the hippocampus, a key component of the episodic and spatial memory system in both humans and rodents. Earlier studies have provided snapshots of morphological, molecular, physiological and behavioral changes in the hippocampus following either acute or repeated stress. However, the cumulative impact of repeated stress on in vivo hippocampal physiology remains unexplored. Here we report the stress‐induced modulation of the spatially receptive fields of the hippocampal CA1 ‘place cells’ as mice explore familiar and novel tracks after 5 and 10 days of immobilization stress. We find that similar to what has been observed following acute stress, five days of repeated stress results in decreased excitability of CA1 pyramidal cells. Following ten days of chronic stress, however, this decreased hippocampal excitability is no longer evident, suggesting adaptation may have occurred. In addition to these changes in neuronal excitability, we find deficient context discrimination, wherein both short‐term and chronic stress impair the ability of the hippocampus to unambiguously distinguish novel and familiar environments. These results suggest that a loss of network flexibility may underlie some of the behavioral deficits accompanying chronic stress.