Prepulse inhibition (PPI), whereby the startle eyeblink response is inhibited by a relatively weak non-startling stimulus preceding the powerful startle eliciting stimulus, is a measure of sensorimotor gating and has been shown to be deficient in schizophrenia patients. There is considerable interest in whether conventional and/or atypical antipsychotic medications can "normalize" PPI deficits in schizophrenia patients. 51 schizophrenia patients participated in a randomized, double-blind controlled trial on the effects of three commonly-prescribed antipsychotic medications (risperidone, olanzapine, or haloperidol) on PPI, startle habituation, and startle reactivity. Patients were tested at baseline, Week 4 and Week 8. Mixed model regression analyses revealed that olanzapine significantly improved PPI from Week 4 to Week 8, and that at Week 8 patients receiving olanzapine produced significantly greater PPI than those receiving risperidone, but not haloperidol. There were no effects of medication on startle habituation or startle reactivity. These results support the conclusion that olanzapine effectively increased PPI in schizophrenia patients, but that risperidone and haloperidol had no such effects. The results are discussed in terms of animal models, neural substrates, and treatment implications.