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Recently, the neuropeptide S (NPS) neurotransmitter system has been identified as a promising psychopharmacological drug target given that NPS has shown anxiolytic-like and stress-reducing properties and memory-enhancing effects in rodent models. NPS binds to the G-protein-coupled receptor encoded by the neuropeptide S receptor gene (NPSR1). A functional variant within this gene leads to an amino-acid exchange (rs324981, Asn107Ile) resulting in a gain-of-function in the Ile107 variant which was recently associated with panic disorder in two independent studies. A potential psychopharmacological effect of NPS on schizophrenia psychopathology was demonstrated by showing that NPS can block NMDA antagonist-induced deficits in prepulse inhibition. We therefore explored a potential role of the NPSR1 Asn107Ile variation in schizophrenia. A case-control sample of 778 schizophrenia patients and 713 healthy control subjects was successfully genotyped for NPSR1 Asn107Ile. Verbal declarative memory and acoustic startle response were measured in subsamples of the schizophrenia patients. The case-control comparison revealed that the low-functioning NPSR1 Asn107 variant was significantly associated with schizophrenia (OR 1.19, p=0.017). Moreover, specifically decreased verbal memory consolidation was found in homozygous Asn107 carriers while memory acquisition was unaffected by NPSR1 genotype. The schizophrenia patients carrying the Ile107 variant demonstrated significantly reduced startle amplitudes but unaffected prepulse inhibition and habituation. The present study confirms findings from rodent models demonstrating an effect of NPS on memory consolidation and startle response in schizophrenia patients. Based on these findings, we consider NPS as a promising target for antipsychotic drug development.