Objective-Deficits in sensory gating are a common feature of schizophrenia. Failure of inhibitory gating mechanisms, shown by poor suppression of evoked responses to repeated auditory stimuli, have been previously studied using EEG methods. These methods yield information about the temporal characteristics of sensory gating deficits, but do not identify brain regions involved in the process. Hence, the neuroanatomical substrates of poor sensory gating in schizophrenia remain largely unknown. This study used functional magnetic resonance imaging (fMRI) to investigate the functional neuroanatomy of sensory gating deficits in schizophrenia.Methods-Twelve patients with schizophrenia and 12 healthy comparison subjects were scanned at 3 Tesla while performing a sensory gating task developed for fMRI. P50 EEG evoked potential recordings from a paired-stimulus conditioning-test paradigm were obtained from the same subjects.Results-Compared to healthy comparison subjects, patients with schizophrenia exhibited greater activation in the hippocampus, thalamus, and dorsolateral prefrontal cortex (DLPFC) during the fMRI sensory gating task. No group difference was observed in the superior temporal gyrus. Schizophrenia subjects also showed decreased P50 suppression as measured with EEG. Hemodynamic response in the fMRI measure was positively correlated with test/conditioning ratios from the EEG sensory gating measure.Conclusions-Poor sensory gating in schizophrenia is associated with dysfunction of an apparent network of brain regions, including the hippocampus, thalamus and DLPFC. Greater activation of these regions is consistent with evidence for diminished inhibitory function in schizophrenia.