It has been suggested that sensorimotor gating deficits as indexed by prepulse inhibition (PPI) of the acoustic startle reflex represent an endophenotypic marker of psychotic conditions such as schizophrenia (SCZ). This hypothesis has been questioned as several studies have found that PPI levels change with improvement in symptoms and are responsive to medications. We tested PPI in a sample of acutely decompensated schizophrenia patients who were re-tested after 2 weeks of hospital treatment. PPI was assessed at three interstimulus intervals (30, 60, and 120 ms) in 23 SCID-diagnosed SCZ patients shortly after admission to an inpatient psychiatric hospital. Eight of these patients were initially tested in a medication-free state, and all were re-tested approximately 2 weeks later after initiation or increase/change of antipsychotic medications. Symptom ratings were collected at both sessions. 20 nonpatient comparison subjects (NCS) were also tested at a 2-week interval. While SCZ patients showed lower PPI at the first session than NCS, after 2 weeks of treatment their PPI increased to levels not different than those of NCS. In contrast, the PPI of NCS remained consistent over a 2-week period. For the SCZ patients, increase in PPI was correlated with a decrease in symptom scores. Our results suggest that PPI can be improved by short-term treatment, and that improvement in sensorimotor gating is associated with treatment-related improvement of symptoms of schizophrenia.