Objective Prepulse inhibition (PPI) of the startle response provides an operational index of sensorimotor gating that is reliably demonstrable in both human and animal subjects. Patients with schizophrenia, first-degree relatives of patients with schizophrenia, patients with schizotypal personality disorder and healthy individuals scoring high on psychometric measures of psychosis-proneness display reduced PPI. This study examined associations between individual differences in “psychosis-proneness” and brain activity during a tactile prepulse inhibition paradigm previously found to reveal activation in controls and deficient activation in schizophrenia patients in the striatum, thalamus, insula, hippocampal, temporal, inferior frontal, and inferior parietal regions. Methods Fourteen right-handed healthy men underwent psychophysiological testing and functional magnetic resonance imaging (fMRI) during a 15-min tactile PPI paradigm involving the use of tactile stimuli as both the pulse (a 40-ms presentation of 30 psi air-puff) and the prepulse (a 20-ms presentation of 6 psi air-puff presented 30-ms or 120-ms before the pulse). Individual differences in “psychosis-proneness” were assessed with Psychoticism scale of the Eysenck Personality Questionnaire-Revised (EPQ-R). Results High psychosis-proneness was associated with lower PPI and reduced activity in the inferior frontal gyrus, insula extending to putamen and thalamus, parahippocampal gyrus, and inferior parietal and middle temporal regions. No regional activity correlated positively with psychosis-proneness. Conclusions The present observations extend the findings observed previously in people with schizophrenia to people with high psychosis-proneness, providing support to continuum theories of psychosis with implications for understanding trait-related neural deficits in schizophrenia.