Cognitive deficits in schizophrenia are associated with prefrontal cortex (PFC) abnormalities. Schizophrenic patients show a reduced performance in tasks engaging the PFC and a reduction of markers of cellular integrity and function. Non-competitive N-methyl-D-aspartate (NMDA) receptor antagonists are widely used as pharmacological models of schizophrenia due to their ability to exacerbate schizophrenia symptoms in patients and to elicit psychotomimetic actions in healthy volunteers. Also, these drugs evoke behavioral alterations in experimental animals that resemble schizophrenia symptoms. The PFC seems to be a key target area for these agents. However, the cellular and network elements involved are poorly known. Cognitive deficits are of particular interest since an early antipsychotic-induced improvement in cognitive performance predicts a better long-term clinical outcome. Here we report that the non-competitive NMDA receptor antagonist phencyclidine (PCP) induces a marked disruption of the activity of PFC. PCP administration increased the activity of a substantial proportion of pyramidal neurons, as evidenced by an increase in discharge rate and in c-fos expression. Examination of the effects of PCP on other brain areas revealed an increased c-fos expression in a number of cortical and subcortical areas, but notably in thalamic nuclei projecting to the PFC. The administration of classical (haloperidol) and/or atypical (clozapine) antipsychotic drugs reversed PCP effects. These results indicate that PCP induces a marked disruption of the network activity in PFC and that antipsychotic drugs may partly exert their therapeutic effect by normalizing hyperactive cortico-thalamocortical circuits.