Deficits in cognitive control, the ability to adjust thoughts or behaviors in order to achieve goals, are now considered to be a core feature of schizophrenia and to be the best predictor of long-term functional outcome. Cognitive control depends on the coordinated activity of a number of brain regions, including the dorsolateral prefrontal cortex (DLPFC). Subjects with schizophrenia exhibit altered activation of the DLPFC, and reduced frontal lobe gamma band (~40 Hz) oscillations, when performing tasks that require cognitive control. Because gamma oscillations require inhibition from GABA interneurons, alterations in DLPFC GABA neurotransmission have been hypothesized to contribute to impaired gamma oscillations and cognition in schizophrenia. This presentation will review the convergent lines of evidence that support this hypothesis and discuss how these findings can be integrated with other observations of altered excitatory neurotransmission. This integration suggests a mechanistic model of "re-set" excitatory-inhibitory balance in the DLPFC that both underlies the impaired gamma oscillations and accounts for the course of functional disturbances in individuals with schizophrenia.