In schizophrenia, cognitive dysfunction is highly predictive of poor patient outcomes and is not responsive to current medications. Postmortem studies have suggested that cognitive deficits in schizophrenia are correlated with modifications in the number and size of inhibitory synapses. To test if these modifications lead to cognitive deficits, we have created a dominant-negative virus [adeno-associated (AAV)-DN1] that disrupts the clustering of γ-aminobutyric acid type A receptors (GABA(A)Rs) at postsynaptic inhibitory specializations. When injected into the frontal cortex of mice, AAV-DN1 impairs GABA(A)R α2 subunit and GABA transporter 1 (GAT-1) clustering, but increases GABA(A)R α1 subunit clustering on the perisomatic region, with no influence on axon-initial segment clustering. Mice expressing AAV-DN1 have prepulse inhibition deficits and impairments in working memory. Significantly, these behavioral deficits are paralleled by a reduction in electroencephalography γ-power. Collectively, our study provides functional evidence revealing that GABAergic synapses in the prefrontal cortex directly contribute to cognition and γ-power.