Identifying the molecular alterations that underlie the pathophysiology of critical clinical features of schizophrenia is an essential step in the rational development of new therapeutic interventions for this devastating illness. Cognitive deficits, such as the impairments in working memory that arise from dysfunction of the dorsolateral prefrontal cortex, are a major determinant of functional outcome in schizophrenia. Here we consider the contributions of disturbances in glutamate, dopamine and GABA neurotransmission to the pathophysiology of working memory impairments in schizophrenia, suggest a cascade of molecular events that might link these disturbances, and argue that the molecular alterations most proximal to the pathophysiology of prefrontal dysfunction offer the most promise as targets for new drug development.