Schizophrenia (SCZ) is a neurodevelopmental disorder. Thus, studying pathogenetic mechanisms underlying SCZ requires studying the development of brain cells. Cortical interneurons (cINs) are consistently observed to be abnormal in SCZ postmortem brains. These abnormalities may explain altered gamma oscillation and cognitive function in patients with SCZ. Of note, currently used antipsychotic drugs ameliorate psychosis, but they are not very effective in reversing cognitive deficits. Characterizing mechanisms of SCZ pathogenesis, especially related to cognitive deficits, may lead to improved treatments. We generated homogeneous populations of developing cINs from 15 healthy control (HC) iPSC lines and 15 SCZ iPSC lines. SCZ cINs, but not SCZ glutamatergic neurons, show dysregulated Oxidative Phosphorylation (OxPhos) related gene expression, accompanied by compromised mitochondrial function. The OxPhos deficit in cINs could be reversed by Alpha Lipoic Acid/Acetyl-L-Carnitine (ALA/ALC) but not by other chemicals previously identified as increasing mitochondrial function. The restoration of mitochondrial function by ALA/ALC was accompanied by a reversal of arborization deficits in SCZ cINs. OxPhos abnormality, even in the absence of any circuit environment with other neuronal subtypes, appears to be an intrinsic deficit in SCZ cINs.