Stress and stress-induced glucocorticoids have been implicated in many neuropsychiatric disorders including schizophrenia. In addition, the neurotrophin, brain derived neurotrophic factor (BDNF) has been shown to play an important role in stress-mediated changes in neuroplasticity, however, the exact relationship between glucocorticoid and BDNF levels in schizophrenia is unclear. Here, we measured the levels of cortisol (a major glucocorticoid hormone in humans) and BDNF in prefrontal cortex and CSF samples of postmortem schizophrenia subjects. We also assessed the levels of cortisol and BDNF in the frontal cortex and plasma from an animal model (the offspring of prenatally stressed rats), which demonstrates several behavioral and neuroendocrine abnormalities similar to schizophrenia. A significant increase in cortisol levels was found in prefrontal cortex and CSF samples from subjects with schizophrenia. The BDNF levels were significantly lower in prefrontal cortex and CSF samples of subjects with schizophrenia (compared to age-matched controls). Data from animal studies indicated that prenatally stressed offspring have significantly higher plasma and prefrontal cortex cortisol, whereas BDNF levels were significantly lower when compared to control, non-stressed offspring. Moreover, olanzapine treatment for 45 days starting at postnatal day 60 significantly attenuated prenatal stress-induced increase in cortisol levels in prefrontal cortex, but no change in BDNF levels was observed after olanzapine treatment. A significant negative correlation between BDNF and cortisol was observed in both human and animal studies. The above data from human and animal studies suggest that a negative association between stress hormone, cortisol and neuroprotective molecule, BDNF plays an important role in the pathophysiology of schizophrenia.