Schizophrenia is a disabling, chronic psychiatric disorder with a prevalence rate of 0.5–1% in the general population. Symptoms include positive (e.g., delusions, hallucinations), negative (e.g., blunted affect, social withdrawal), as well as cognitive symptoms (e.g., memory and attention problems). Although 75–85% of patients with schizophrenia report cognitive impairments, the underlying neuropharmacological mechanisms are not well understood and currently no effective treatment is available for these impairments. This has led to the Measurement and Treatment Research to Improve Cognition in Schizophrenia (MATRICS) initiative, which established seven cognitive domains that are fundamentally impaired in schizophrenia. These domains include verbal learning and memory, visual learning and memory, working memory, attention and vigilance, processing speed, reasoning and problem solving, and social cognition. Recently, a growing number of studies have been conducted trying to identify the underlying neuropharmacological mechanisms of cognitive impairments in schizophrenia patients. Specific cognitive impairments seem to arise from different underlying neuropharmacological mechanisms. However, most review articles describe cognition in general and an overview of the mechanisms involved in these seven separate cognitive domains is currently lacking. Therefore, we reviewed the underlying neuropharmacological mechanisms focusing on the domains as established by the MATRICS initiative which are considered most crucial in schizophrenia.