Neural synchrony and functional connectivity are disrupted in neuropsychiatric disorders such as schizophrenia. However, these alterations and how they are affected by commonly prescribed neuropsychiatric medication have not been characterized in depth. Here, we investigated changes in neural dynamics of circuits involving the prefrontal cortex and the hippocampus during psychosis induced by the NMDAR antagonist phencyclidine and subsequent recovery by three different antipsychotic drugs (APDs), the classical APD haloperidol and two atypical APDs, clozapine and risperidone, in freely moving mice. We found that the psychotomimetic effects of phencyclidine were associated with hypersynchronization and disrupted communication of prefrontal-hippocampal pathways. Major alterations occurred in the prefrontal cortex, where phencyclidine increased oscillatory power at delta, high gamma and high frequencies (<100 Hz) and generated aberrant cross-frequency coupling, suggesting the presence of hypersynchronous cortical microcircuits. Cross-regional coupling and phase coherence were also enhanced, further reflecting that the circuit's functional connectivity was increased. Phencyclidine also redirected the intrinsic flow of information at theta frequencies that traveled from the hippocampus to the prefrontal cortex into delta rhythms that traveled in the opposite direction. The three APDs rescued most phencyclidine-induced changes in power, coupling, phase coherence, and directionality, suggesting common cellular mechanisms of antipsychotic action. However, some differential effects were identified, likely resulting from the distinct affinity the three APDs have for dopamine and serotonin receptors. We therefore investigated how serotonin 1A (5-HT1AR) and 2A receptors (5-HT2AR) compare to the actions of the APDs. 5-HT2AR antagonism by M100907 and 5-HT1AR agonism by 8-OH-DPAT rescued phencyclidine-induced increased power, coupling and phase coherence but were unable to normalize the circuit's theta directionality. This suggests that other targets of the AAPDs working in tandem with 5-HT1ARs and 5-HT2ARs are required to ameliorate this key feature of the circuit.