There is a critical need to develop novel therapeutic strategies for addressing the negative and cognitive symptom domains in schizophrenia (SCZ). Multiple clinical and preclinical studies support the hypothesis that loss of GABAergic inhibitory transmission in the prefrontal cortex (PFC) and other forebrain regions may play a critical role in the pathophysiological changes underlying cognitive and social behavioral deficits in SCZ patients. Recently, we demonstrated that activation of the mGlu1 subtype of metabotropic glutamate receptor increases inhibitory transmission in the PFC by selective excitation of somatostatin‐expressing GABA interneurons. Genetic studies in humans reveal an association between deleterious non‐synonymous single nucleotide polymorphisms (nsSNPS) in of the human gene encoding mGlu1 (GRM1) and SCZ, raising the possibility that mGlu1 signaling is critical to the function of brain circuits underlying symptoms associated with this disorder.Here, we examine whether novel positive allosteric modulators (PAMs) selective for mGlu1 reverse electrophysiological effects and behavioral deficits in an MK‐801‐induced animal model of SCZ. We used ex vivo whole‐cell patch‐clamp electrophysiology to show that MK‐801 decreased the frequency of spontaneous inhibitory postsynaptic currents onto layer V pyramidal cells of the PFC, and this cortical disinhibition was reversed by mGlu1 activation. Furthermore, acute MK‐801 treatment induces inhibitory deficits onto PFC‐basolateral amygdala (BLA), but not PFC‐nucleus accumbens, projecting layer V pyramidal cells that can be reversed by selective mGlu1 activation. PFC‐BLA projections are known to contribute functionally to social‐approach behavior, while the BLA plays a critical role in object recognition and cognition broadly. We found that the mGlu1 PAM VU6004909 effectively reversed MK801‐induced deficits in social interaction and social novelty preference in a three‐chamber assay. Additionally, VU6004909 restored novel object recognition following MK‐801 treatment. In combination with our previous reports that mGlu1 PAMs reverse deficits in inhibitory transmission in the PFC, the current study provides strong evidence for mGlu1 PAMs as a promising novel approach for the treatment of social and cognitive deficits in SCZ patients.