Psychosis is characterized by a diminished ability of the brain to distinguish externally driven activity patterns from self-generated activity patterns. Antipsychotic drugs are a class of small molecules with relatively broad binding affinity for a variety of neuromodulator receptors that, in humans, can prevent or ameliorate psychosis. How these drugs influence the function of cortical circuits and in particular their ability to identify self-generated activity patterns is still largely unclear. Here we used widefield calcium imaging to determine the cell type specific functional effects of antipsychotic drugs in mouse dorsal cortex during visuomotor integration. By comparing cell type specific activation patterns between locomotion onsets that were experimentally coupled to self-generated visual feedback and locomotion onsets that were not coupled, we show that deep cortical layers were differentially activated in these two conditions. We then show that the antipsychotic drug clozapine disrupted visuomotor integration at locomotion onsets also primarily in deep cortical layers. Given that one of the key components of visuomotor integration in cortex are long-range cortico-cortical connections, we tested whether the effect of clozapine was detectable in the correlation structure of activity patterns across dorsal cortex. We found that clozapine, as well as two other antipsychotic drugs, aripiprazole and haloperidol, resulted in a strong reduction in correlations of layer 5 activity between cortical areas and impaired the spread of visuomotor prediction errors generated in visual cortex. Our results are consistent with the interpretation that a major functional effect of antipsychotic drugs is an alteration of the activation of internal representations as a consequence of reduced long-range layer 5 mediated communication.