Endophenotypes are quantitative, heritable traits that may help to elucidate the pathophysiologic mechanisms underlying complex disease syndromes, such as schizophrenia. They can be assessed at numerous levels of analysis; here, we review electrophysiological endophenotypes that have shown promise in helping us understand schizophrenia from a more mechanistic point of view. For each endophenotype, we describe typical experimental procedures, reliability, heritability, and reported gene and neurobiological associations. We discuss recent findings regarding the genetic architecture of specific electrophysiological endophenotypes, as well as converging evidence from EEG studies implicating disrupted balance of glutamatergic signaling and GABAergic inhibition in the pathophysiology of schizophrenia. We conclude that refining the measurement of electrophysiological endophenotypes, expanding genetic association studies, and integrating data sets are important next steps for understanding the mechanisms that connect identified genetic risk loci for schizophrenia to the disease phenotype.