N-methyl-d-aspartate (NMDA) receptor (NMDAR) hypofunction plays a key role in pathophysiology of schizophrenia. Since NMDAR hypofunction has also been reported in autism, Alzheimer’s disease and cognitive dementia, it is crucial to identify the location, timing, and mechanism of NMDAR hypofunction for schizophrenia for better understanding of disease etiology and for novel therapeutic intervention. In this review, we first discuss the shared underlying mechanisms of NMDAR hypofunction in NMDAR antagonist models and the anti-NMDAR autoantibody model of schizophrenia and suggest that NMDAR hypofunction could occur in GABAergic neurons in both models. Preclinical models using transgenic mice have shown that NMDAR hypofunction in cortical GABAergic neurons, in particular parvalbumin-positive fast-spiking interneurons, in the early postnatal period confers schizophrenia-related phenotypes. Recent studies suggest that NMDAR hypofunction can also occur in PV-positive GABAergic neurons with alterations of NMDAR–associated proteins, such as neuregulin/ErbB4, α7nAChR, and serine racemase. Furthermore, several environmental factors, such as oxidative stress, kynurenic acid and hypoxia, may also potentially elicit NMDAR hypofunction in GABAergic neurons in early postnatal period. Altogether, the studies discussed here support a central role for GABAergic abnormalities in the context of NMDAR hypofunction. We conclude by suggesting potential therapeutic strategies to improve the function of fast-spiking neurons.