A major goal of translational neuroscience is to identify neural circuit abnormalities in neuropsychiatric disorders that can be studied in animal models to facilitate the development of new treatments. Oscillations in the gamma band (30-100 Hz) of the electroencephalogram have received considerable interest as the basic mechanisms underlying these oscillations are understood, and gamma abnormalities have been found in schizophrenia (SZ). Animal models of SZ based on hypofunction of the N-methyl-d-aspartate receptor (NMDAR) demonstrate increased spontaneous broadband gamma power, but this phenomenon has not been identified clearly in patients with SZ. To examine spontaneous gamma power and its relationship to evoked gamma oscillations in the auditory cortex of patients with SZ. We performed a cross-sectional study including 24 patients with chronic SZ and 24 matched healthy control participants at the Veterans Affairs Boston Healthcare System from January 1, 2009, through December 31, 2012. Electroencephalograms were obtained during auditory steady-state stimulation at multiple frequencies (20, 30, and 40 Hz) and during a resting state in 18 participants in each group. Electroencephalographic activity in the auditory cortex was estimated using dipole source localization. Auditory steady-state response (ASSR) measures included the phase-locking factor and evoked power. Spontaneous gamma power was measured as induced (non-phase-locked) gamma power in the ASSR data and as total gamma power in the resting-state data. The ASSR phase-locking factor was reduced significantly in patients with SZ compared with controls for the 40-Hz stimulation (mean [SD], 0.075 [0.028] vs 0.113 [0.065]; F1,46 = 6.79 [P = .012]) but not the 20- or the 30-Hz stimulation (0.042 [0.038] vs 0.043 [0.034]; F1,46 = 0.006 [P = .938] and 0.084 [0.040] vs 0.098 [0.050]; F1,46 = 1.605 [P = .212], respectively), repeating previous findings. The mean [SD] broadband-induced (30-100 Hz) gamma power was increased in patients with SZ compared with controls during steady-state stimulation (6.579 [3.783] vs 3.984 [1.843]; F1,46 = 9.128 [P = .004]; d = 0.87) but not during rest (0.006 [0.003] vs 0.005 [0.002]; F1,34 = 1.067 [P = .309]; d = 0.35). Induced gamma power in the left hemisphere of the patients with SZ during the 40-Hz stimulation was positively correlated with auditory hallucination symptoms (tangential, ρ = 0.587 [P = .031]; radial, ρ = 0.593 [P = .024]) and negatively correlated with the ASSR phase-locking factor (baseline: ρ = -0.572 [P = .024]; ASSR: ρ = -0.568 [P = .032]). Spontaneous gamma activity is increased during auditory steady-state stimulation in SZ, reflecting a disruption in the normal balance of excitation and inhibition. This phenomenon interacts with evoked oscillations, possibly contributing to the gamma ASSR deficit found in SZ. The similarity of increased spontaneous gamma power in SZ to the findings of increased spontaneous gamma power in animal models of NMDAR hypofunction suggests that spontaneous gamma power could serve as a biomarker for the integrity of NMDARs on parvalbumin-expressing inhibitory interneurons in humans and in animal models of neuropsychiatric disorders.