There is considerable interest in the regulation of sensorimotor gating, since deficits in this process could play a critical role in the symptoms of schizophrenia and other psychiatric disorders. Sensorimotor gating is often studied in humans and rodents using the prepulse inhibition of the acoustic startle response (PPI) model, in which an acoustic prepulse suppresses behavioral output to a startle-inducing stimulus. However, the molecular and neural mechanisms underlying PPI are poorly understood. Here, we show that a regulatory pathway involving protein phosphatase 2A (PP2A), glycogen synthase kinase 3  (GSK3), and their downstream target, the M-type potassium channel, regulates PPI. Mice (Mus musculus) carrying a hypomorphic allele of Ppp2r5␦, encoding a regulatory subunit of PP2A, show attenuated PPI. This PPP2R5␦ reduction increases the phosphorylation of GSK3 at serine 9, which inactivates GSK3, indicating that PPP2R5␦ positively regulates GSK3 activity in the brain. Consistently, genetic and pharmacological manipulations that reduce GSK3 function attenuate PPI. The M-type potassium channel subunit, KCNQ2, is a putative GSK3 substrate. Genetic reduction of Kcnq2 also reduces PPI, as does systemic inhibition of M-channels with linopirdine. Importantly, both the GSK3 inhibitor 3-(2,4-dichlorophenyl)-4-(1-methyl-1H-indol-3-yl)1H-pyrrole-2,5-dione (SB216763) and linopirdine reduce PPI when directly infused into the medial prefrontal cortex (mPFC). Whole-cell electrophysiological recordings of mPFC neurons show that SB216763 and linopirdine have similar effects on firing, and GSK3 inhibition occludes the effects of M-channel inhibition. These data support a previously uncharacterized mechanism by which PP2A/GSK3 signaling regulates M-type potassium channel activity in the mPFC to modulate sensorimotor gating.