Current treatments of schizophrenia are compromised by their inability to treat all symptoms of the disease and their side-effects. Whilst existing antipsychotic drugs are effective against positive symptoms, they have negligible efficacy against the prefrontal cortex (PFC)-associated cognitive deficits and negative symptoms. New models that reproduce core pathophysiological features of schizophrenia are more likely to have improved predictive validity in identifying new treatments. We have developed a NMDA receptor antagonist model that reproduces core PFC deficits of schizophrenia and discuss this in relation to pathophysiology and treatments. Subchronic and chronic intermittent PCP (2.6 mg/kg i.p.) was administered to rats. PFC activity was assessed by 2-deoxyglucose imaging, parvalbumin and Kv3.1 mRNA expression, and the attentional set-shifting test (ASST) of executive function. Affymetrix gene array technology was employed to examine gene expression profile patterns. PCP treatment reduced glucose utilization in the PFC (hypofrontality). This was accompanied by a reduction in markers of GABAergic interneurones (parvalbumin and Kv3.1 mRNA expression) and deficits in the extradimensional shift dimension of the ASST. Consistent with their clinical profile, the hypofrontality was not reversed by clozapine or haloperidol. Transcriptional analysis revealed patterns of change consistent with current neurobiological theories of schizophrenia. This model mirrors core neurobiological deficits of schizophrenia; hypofrontality, altered markers of GABAergic interneurone activity and deficits in executive function. As such it is likely to be a valuable translational model for understanding the neurobiological mechanisms underlying hypofrontality and for identifying and validating novel drug targets that may restore PFC deficits in schizophrenia.