Schizophrenia is a polygenetic disorder whose clinical onset is often associated with behavioral stress. Here, we present a model of disease pathogenesis that builds on our observation that the synaptic immediate early gene NPTX2 is reduced in cerebrospinal fluid of individuals with recent onset schizophrenia. NPTX2 plays an essential role in maintaining excitatory homeostasis by adaptively enhancing circuit inhibition. NPTX2 function requires activity-dependent exocytosis and dynamic shedding at synapses and is coupled to circadian behavior. Behavior-linked NPTX2 trafficking is abolished by mutations that disrupt select activity-dependent plasticity mechanisms of excitatory neurons. Modeling NPTX2 loss of function results in failure of parvalbumin interneurons in their adaptive contribution to behavioral stress, and animals exhibit multiple neuropsychiatric domains. Because the genetics of schizophrenia encompasses diverse proteins that contribute to excitatory synapse plasticity, the identified vulnerability of NPTX2 function can provide a framework for assessing the impact of genetics and the intersection with stress.