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There is substantial evidence that both N -methyl-D-aspartate receptor (NMDAR) hypofunction and dysfunction of GABAergic neurotransmission contribute to schizophrenia, though the relationship between these pathophysiological processes remains largely unknown. Although models using cell-type-specific genetic deletion of NMDARs have been informative, they display overly pronounced phenotypes extending beyond those of schizophrenia. Here, we used the serine racemase knockout (SRKO) mice, a model of reduced NMDAR activity rather than complete receptor elimination, to examine the link between NMDAR hypofunction and decreased GABAergic inhibition. The SRKO mice, in which there is a >90% reduction in the NMDAR coagonist d-serine, exhibit many of the neurochemical and behavioral abnormalities observed in schizophrenia. We found a significant reduction in inhibitory synapses onto CA1 pyramidal neurons in the SRKO mice. This reduction increases the excitation/inhibition balance resulting in enhanced synaptically driven neuronal excitability without changes in intrinsic excitability. Consistently, significant reductions in inhibitory synapse density in CA1 were observed by immunohistochemistry. We further show, using a single-neuron genetic deletion approach, that the loss of GABAergic synapses onto pyramidal neurons observed in the SRKO mice is driven in a cell-autonomous manner following the deletion of SR in individual CA1 pyramidal cells. These results support a model whereby NMDAR hypofunction in pyramidal cells disrupts GABAergic synapses leading to disrupted feedback inhibition and impaired neuronal synchrony. NEW & NOTEWORTHY Recently, disruption of excitation/inhibition (E/I) balance has become an area of considerable interest for psychiatric research. Here, we report a reduction in inhibition in the serine racemase knockout mouse model of schizophrenia that increases E/I balance and enhances synaptically driven neuronal excitability. This reduced inhibition was driven cell-autonomously in pyramidal cells lacking serine racemase, suggesting a novel mechanism for how chronic NMDA receptor hypofunction can disrupt information processing in schizophrenia.