Schizophrenia is a major mental disorder associated with core neurocognitive impairments. The ability to recreate these deficits in animal models is limited, hampering ongoing translational drug development efforts. This paper reviews the use of electroencephalography (EEG)-based neurophysiological measures, such as event-related potentials (ERPs) or event-related spectral perturbations (ERSPs), as novel translational biomarkers for both etiological and treatment development research in neuropsychiatry. In schizophrenia, cognitive impairments manifest as deficits not only in high-level processes, such as working memory or executive processing, but also as deficits in neurophysiological responses to simple auditory and visual stimuli. Moreover, neurophysiological responses can be assessed even in untrained animals and are therefore particularly amenable to translational, cross-species investigation. To date, several sensory-level ERP measures, including auditory mismatch negativity and N1, and visual P1 and steady-state responses, have been validated in both human clinical investigations and animal models. Deficits have been tied to impaired neurotransmission at N-methyl-d-aspartate–type glutamate receptors (NMDARs). Time-frequency analysis of ERSP permits further extension of these findings from physiological to circuit/cellular levels of analysis.