Although considerable evidence suggests that the chemical synapse is a lynchpin underlying affective disorders, how molecular insults differentially affect specific synaptic connections remains poorly understood. For instance, Neurexin 1a and 2 (NRXN1 and NRXN2) and CNTNAP2 (also known as CASPR2), all members of the neurexin superfamily of transmembrane molecules, have been implicated in neuropsychiatric disorders. However, their loss leads to deficits that have been best characterized with regard to their effect on excitatory cells(1,2). Notably, other disease-associated genes such as BDNF and ERBB4 implicate specific interneuron synapses in psychiatric disorders(3,4). Consistent with this, cortical interneuron dysfunction has been linked to epilepsy, schizophrenia and autism(5,6). Using a microarray screen that focused upon synapse-associated molecules, we identified Cntnap4 (contactin associated protein-like 4, also known as Caspr4) as highly enriched in developing murine interneurons. In this study we show that Cntnap4 is localized presynaptically and its loss leads to a reduction in the output of cortical parvalbumin (PV)-positive GABAergic (gamma-aminobutyric acid producing) basket cells. Paradoxically, the loss of Cntnap4 augments midbrain dopaminergic release in the nucleus accumbens. In Cntnap4 mutant mice, synaptic defects in these disease-relevant neuronal populations are mirrored by sensory-motor gating and grooming endophenotypes; these symptoms could be pharmacologically reversed, providing promise for therapeutic intervention in psychiatric disorders.