Human postmortem studies suggest a major role for abnormalities in GABAergic interneurons in the prefrontal cortex in schizophrenia. Cortical interneurons differentiated from induced pluripotent stem cells (iPSCs) of schizophrenia subjects showed significantly lower levels of glutamate decarboxylase 67 (GAD67), replicating findings from multiple postmortem studies, as well as reduced levels of synaptic proteins gehpyrin and NLGN2. Co-cultures of the interneurons with excitatory cortical pyramidal neurons from schizophrenia iPSCs showed reduced synaptic puncta density and lower action potential frequency. NLGN2 overexpression in schizophrenia neurons rescued synaptic puncta deficits while NLGN2 knockdown in healthy neurons resulted in reduced synaptic puncta density. Schizophrenia interneurons also had significantly smaller nuclear area, suggesting an innate oxidative stressed state. The antioxidant N-acetylcysteine increased the nuclear area in schizophrenia interneurons, increased NLGN2 expression and rescued synaptic deficits. These results implicate specific deficiencies in the synaptic machinery in cortical interneurons as critical regulators of synaptic connections in schizophrenia and point to a nexus between oxidative stress and NLGN2 expression in mediating synaptic deficits in schizophrenia.