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Daily experience suggests that we perceive distances near us linearly. However, the actual geometry of spatial representation in the brain is unknown. Here we report that neurons in the CA1 region of rat hippocampus that mediate spatial perception represent space according to a non-linear hyperbolic geometry. This geometry uses an exponential scale and yields greater positional information than a linear scale. We found that the size of the representation matches the optimal predictions for the number of CA1 neurons. The representations also dynamically expanded proportional to the logarithm of time that the animal spent exploring the environment, in correspondence with the maximal mutual information that can be received. The dynamic changes tracked even small variations due to changes in the running speed of the animal. These results demonstrate how neural circuits achieve efficient representations using dynamic hyperbolic geometry.