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Cognitive deficits in individuals with schizophrenia (SCZ) are considered core symptoms of this disorder, and can manifest at the prodromal stage. Antipsychotics ameliorate positive symptoms but only modestly improve cognitive symptoms. The lack of treatments that improve cognitive abilities currently represents a major obstacle in developing more effective therapeutic strategies for this debilitating disorder. While D4 receptor (D4R)-specific antagonists are ineffective in the treatment of positive symptoms, animal studies suggest that D4R drugs can improve cognitive deficits. Moreover, recent work from our group suggests that D4Rs synergize with the neuregulin/ErbB4 signaling pathway, genetically identified as risk factors for SCZ, in parvalbumin (PV)-expressing interneurons to modulate gamma oscillations. These high-frequency network oscillations correlate with attention and increase during cognitive tasks in healthy subjects, and this correlation is attenuated in affected individuals. This finding, along with other observations indicating impaired GABAergic function, has led to the idea that abnormal neural activity in the prefrontal cortex (PFC) in individuals with SCZ reflects a perturbation in the balance of excitation and inhibition. Here we review the current state of knowledge of D4R functions in the PFC and hippocampus, two major brain areas implicated in SCZ. Special emphasis is given to studies focusing on the potential role of D4Rs in modulating GABAergic transmission and to an emerging concept of a close synergistic relationship between dopamine/D4R and neuregulin/ErbB4 signaling pathways that tunes the activity of PV interneurons to regulate gamma frequency network oscillations and potentially cognitive processes. [ABSTRACT FROM AUTHOR]