Impairments in certain cognitive functions mediated by the dorsolateral prefrontal cortex, such as working memory, are core features of schizophrenia. Convergent findings suggest that these disturbances are associated with alterations in markers of inhibitory gamma-aminobutyric acid and excitatory glutamate neurotransmission in the dorsolateral prefrontal cortex. Specifically, reduced gamma-aminobutyric acid synthesis is present in the subpopulation of gamma-aminobutyric acid neurons that express the calcium-binding protein parvalbumin. Despite presynaptic and postsynaptic compensatory responses, the resulting impaired inhibitory regulation of pyramidal neurons contributes to a reduction in the synchronized neuronal activity that is required for working memory function. Several lines of evidence suggest that these changes may be either secondary to or exacerbated by impaired signaling via the N-methyl-d-aspartate class of glutamate receptors. These findings suggest specific targets for therapeutic interventions to improve cognitive function in individuals with schizophrenia.