Deficits in working memory and cognitive control in schizophrenia are associated with impairments in prefrontal cortical function, including altered gamma band oscillations. These abnormalities are thought to reflect a deficiency in the synchronization of pyramidal cell activity that is dependent, in part, on gamma-aminobutyric acid (GABA) neurotransmission through GABA type A (GABA _A ) receptors containing α ₂ subunits. The authors conducted a proof-of-concept clinical trial designed to test the hypothesis that a novel compound with relatively selective agonist activity at GABA _A receptors containing α ₂ subunits would improve cognitive function and gamma band oscillations in individuals with schizophrenia. Participants were male subjects (N=15) with chronic schizophrenia who were randomly assigned to receive 4 weeks of treatment with the study drug MK-0777, a benzodiazepine-like agent with selective activity at GABA _A receptors containing α ₂ or α ₃ subunits, or a matched placebo in a double-blind fashion. Outcome measures were the Brief Psychiatric Rating Scale (BPRS), Repeatable Battery for the Assessment of Neuropsychological Status, three tests of working memory and/or cognitive control (N-back, AX Continuous Performance Test, and Preparing to Overcome Prepotency), and EEG measures of gamma band oscillations induced during the Preparing to Overcome Prepotency task. Compared with placebo, the MK-0777 compound was associated with improved performance on the N-back, AX Continuous Performance Test, and Preparing to Overcome Prepotency tasks. The compound was also associated with increased frontal gamma band power during the Preparing to Overcome Prepotency task. No effects of the MK-0777 compound were detected in BPRS or Repeatable Battery for the Assessment of Neuropsychological Status scores, with the exception of improvement on the Repeatable Battery for the Assessment of Neuropsychological Status delayed memory index. The MK-0777 agent was well-tolerated. These findings provide preliminary support for the hypothesis that enhanced GABA activity at α ₂ subunit containing GABA _A receptors improves behavioral and electrophysiological measures of prefrontal function in individuals with schizophrenia.