Mismatch negativity (MMN) to pitch (pMMN) and to duration (dMMN) deviant stimuli is significantly more attenuated in long-term psychotic illness compared to first-episode psychosis (FEP). It was recently shown that source-modeling of magnetically recorded MMN increases the detection of left auditory cortex MMN deficits in FEP, and that computational circuit modeling of electrically recorded MMN also reveals left-hemisphere auditory cortex abnormalities. Computational modeling using dynamic causal modeling (DCM) can also be used to infer synaptic activity from EEG-based scalp recordings. We measured pMMN and dMMN with EEG from 26 FEP and 26 matched healthy controls (HCs) and used a DCM conductance-based neural mass model including α-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid, N-methyl-D-Aspartate (NMDA), and Gamma-aminobutyric acid receptors to identify any changes in effective connectivity and receptor rate constants in FEP. We modeled MMN sources in bilateral A1, superior temporal gyrus, and inferior frontal gyrus (IFG). No model parameters distinguished groups for pMMN. For dMMN, reduced NMDA receptor activity in right IFG in FEP was detected. This finding is in line with literature of prefrontal NMDA receptor hypofunction in chronic schizophrenia and suggests impaired NMDA-induced synaptic plasticity may be present at psychosis onset where scalp dMMN is only moderately reduced. To the best of our knowledge, this is the first report of impaired NMDA receptor activity in FEP found through computational modeling of dMMN and shows the potential of DCM to non-invasively reveal synaptic-level abnormalities that underly subtle functional auditory processing deficits in early psychosis.