Cognitive deficits are a core feature of schizophrenia and are associated with dysfunction of prefrontal cortex activity (hypofrontality). Although cognitive deficits are highly debilitating to schizophrenic patients, antipsychotic drugs have limited efficacy in the treatment of these symptoms. Development of effective models that mirror these aspects of the disease should aid in the understanding and treatment of cognitive dysfunction in schizophrenia. We have recently shown that following chronic intermittent low dose PCP treatment, rats exhibit reductions in prefrontal cortex glucose utilisation (hypofrontality) (Cochran et al., 2003) paralleling deoxyglucose imaging results in patients with schizophrenia. In order to understand more about the neurobiological processes that underlie these deficits we have employed genomic (see Winchester et al this meeting) neurochemical and behavioural techniques. Of particular relevance to human post mortem findings are the deficits in markers of GABAergic interneurone activity. Repeated PCP treatment produced deficits in parvalbumin mRNA, Kv3.1, but not calbindin mRNA expression in the prefrontal cortex indicating that the properties of the chandelier subset of fast spiking interneurones are affected. Chandelier cells occupy a key position in prefrontal cortex function in that they are primary targets of thalamocortical neurones and dopaminergic neurones and themselves strongly influence the output of pyramidal cells. Thus disruption of chandelier cell function is predicted to result in a disruption of the corticolimbothalamic network. In schizophrenia there are deficits across several cognitive domains, including the capacity to effectively transfer attentional set between abstract properties of complex stimuli as shown in the Wisconsin Card Sort Test. In order to assess, whether similar deficits exists following chronic PCP treatment to rats, the attention set-shifting task was employed (Birrel and Brown 2000)which is formally equivalent to the human Wisconsin Card Sort Test. In a single session rats perform a series of seven two-choice discriminations, at the core of which is the extra-dimensional shift (EDS) test that necessitates a shift of attention between perceptual dimensions. Seventy two hours after the final PCP treatment, rats exhibited a significant deficit in their ability to shift attention between, but not within, perceptual dimensions. These findings suggest that repeated intermittent administration of PCP produced a persistent selective deficit in ability to transfer attentional set, but not in ability to reverse stimulus-reward associations akin to that observed in schizophrenia. Existing antipsychotic medications have limited ability to improve cognitive deficits or hypofrontality in patients. Investigations of the ability of clozapine and haloperidol to reverse chronic PCP-induced hypofrontality and GABAergic interneurone deficits in rats showed that neither drug reversed hypofrontality. Unlike haloperidol, clozapine reversed parvalbumin deficits indicating a partial ability to restore prefrontal cortex activity. The ability of these drugs to reverse cognitive deficits is inconclusive partly due to their other behavioural confounding effects. The effects of novel cognitive enhancers in these models will be discussed. In summary, repeated PCP treatment to rats, results in neuroadaptive processes in GABAergic interneurones within a corticolimbothalamic network that may contribute to hypofrontality and cognitive deficits similar to that observed in schizophrenia. This PCP treatment regime represents a valuable translational model for further understanding the neurobiological processes contributing to schizophrenia pathology and the validation of new therapeutic agents for the treatment of the cognitive deficits of the disease.