N-methyl-D-aspartate (NMDA) receptor hypofunction leading to neural network dysfunction is thought to play an important role in the pathophysiology of cognitive impairment associated with schizophrenia (CIAS). Increasing extracellular concentrations of the NMDA receptor co-agonist glycine through inhibition of glycine transporter-1 (GlyT1) has the potential to treat CIAS by improving cortical network function through enhanced glutamatergic signaling. Indeed, the novel GlyT1 inhibitor iclepertin (BI 425809) improved cognition in a recent clinical study in patients with schizophrenia. The present study tested the ability of iclepertin to reverse deficits in auditory sensory processing and cortical network function induced by the uncompetetive NMDA receptor antagonist, MK-801, using electroencephalography (EEG) to measure auditory event-related potentials (AERPs) and 40 Hz auditory steady-state response (ASSR). In addition, improvements in memory performance with iclepertin were evaluated using the T-maze spontaneous alternation test in MK-801-treated mice and the social recognition test in naïve rats. Iclepertin reversed MK-801-induced deficits in the AERP readouts N1 amplitude and N1 gating, as well as reversing deficits in 40 Hz ASSR power and intertrial coherence. Additionally, iclepertin significantly attenuated an MK-801-induced increase in basal gamma power. Furthermore, iclepertin reversed MK-801-induced working memory deficits in mice and improved social recognition memory performance in rats. Overall, this study demonstrates that inhibition of GlyT1 is sufficient to attenuate MK-801-induced deficits in translatable EEG parameters relevant to schizophrenia. Moreover, iclepertin showed memory-enhancing effects in rodent cognition tasks, further demonstrating the potential for GlyT1 inhibition to treat CIAS. SIGNIFICANCE STATEMENT: Despite the significant patient burden caused by cognitive impairment associated with schizophrenia, there are currently no approved pharmacotherapies. In this preclinical study, the novel glycine transporter inhibitor iclepertin (BI 425809) reversed sensory processing deficits and neural network dysfunction evoked by inhibition of N-methyl-D-aspartate receptors and enhanced working memory performance and social recognition in rodents. These findings support previous clinical evidence for the procognitive effects of iclepertin.