Schematic of components of the DLPFC layer 3 microcircuitry thought to be responsible for gamma oscillations and working memory. (A) In the unaffected circuit, current data support the notion that excitatory inputs recruit the activity of parvalbumin basket cells (PV BC) which inhibit large groups of pyramidal neurons (PN) simultaneously, thus synchronizing their subsequent activity. This synchronous activity occurs as gamma frequency oscillations which is thought to reflect the neural representation of working memory. Excitatory axon terminals from layer 3 pyramidal neurons also synapse onto somatostatin (SST)-expressing interneurons in layers 2–3, which target the distal dendrites of other groups of pyramidal neurons and inhibit pyramidal neurons that encode stimuli not related to the working memory memoranda. Calretinin (CR)-expressing interneurons target both PV and SST neurons, serving to disinhibit pyramidal neurons. PV chandelier cells (PV CHC) form connections directly onto the axon initial segment, and thus are poised to rapidly suppress the output of pyramidal neurons. (B) In schizophrenia, the morphological alterations to pyramidal neurons, which include a lower complement of dendritic spines, lower dendritic spine density and smaller somal sizes, suggest that these cells are hypoactive, leading to weaker recruitment of PVBCs and thus lower gamma oscillatory power. The hypoactivity of pyramidal neurons in layer 3 might arise from NMDAR hypofunction on dendrites receiving other excitatory inputs. Lower GABAA α1 receptor subunit mRNA expression in pyramidal neurons, together with lower PV and GAD67 in the PV BC terminals, suggests that both pre- and postsynaptic inhibition of PV BCs onto pyramidal neurons is lower. While the cell type-specific deficits in SST neurons are less well-defined, lower SST mRNA expression suggests these neurons may have an impaired ability to laterally inhibit other populations of pyramidal cells. CR cells do not exhibit lower levels of CR mRNA or protein in the illness, suggesting that these cells may not be affected in schizophrenia. PV CHCs express normal levels of GAD67, but lower GAT1 in their cartridges and higher levels of the GABAA receptor α2 subunit on the axon initial segment of the pyramidal neuron. Together, these alterations suggest that GABA signaling from PV CHCs might be higher in schizophrenia.