Schizophrenia is a chronic severe mental disorder characterized by psychosis, cognitive impairments, and social and motivational deficits. It is associated with a progressive loss of cortical volume after onset of psychosis; nevertheless, cortical atrophy correlates with the cognitive impairments and the negative symptoms but not with the psychosis. The cortical atrophy is not primarily due to neuronal degeneration but rather to neuronal atrophy and loss of glutamatergic synapses. A downregulation of the presynaptic markers for the parvalbumin-expressing GABAergic interneurons that provide recurrent inhibition to cortical pyramidal neurons is another consistent pathologic feature. Antipsychotic drugs continue after 50 years to be the mainstay of treatment although these drugs, with the possible exception of clozapine, have negligible effects on cognition and negative symptoms. Pharmacologic challenge studies, postmortem analyses and a recent sufficiently powered genome-wide association study and copy number variant studies provide compelling evidence that NMDA receptor hypofunction is an important pathophsysiologic feature of schizophrenia. Silencing the gene encoding serine racemase, the enzyme that synthesizes the cortical-limbic NMDA receptor co-agonist, D-serine, replicates the dendritic and GABAergic pathology and cognitive deficits of schizophrenia in mice. Pharmacologic strategies to overcome NMDA receptor hypofunction hold promise of treating the disabling cognitive and negative symptoms.