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Advances in psychiatric neuroscience have transformed our understanding of impaired and spared brain functions in psychotic illnesses. Despite substantial progress, few (if any) laboratory tests have graduated to clinics to inform diagnoses, guide treatments, and monitor treatment response. Providers must rely on careful behavioral observation and interview techniques to make inferences about patients’ inner experiences and then secondary deductions about impacted neural systems. Development of more effective treatments has also been hindered by a lack of translational quantitative biomarkers that can span the brain–behavior treatment knowledge gap. Here, we describe an example of a simple, low-cost, and translatable electroencephalography (EEG) measure that offers promise for improving our understanding and treatment of psychotic illnesses: mismatch negativity (MMN). MMN is sensitive to and/or predicts response to some pharmacologic and nonpharmacologic interventions and accounts for substantial portions of variance in clinical, cognitive, and psychosocial functioning in schizophrenia (SZ). This measure has recently been validated for use in large-scale multisite clinical studies of SZ. Finally, MMN greatly improves our ability to forecast which individuals at high clinical risk actually develop a psychotic illness. These attributes suggest that MMN can contribute to personalized biomarker-guided treatment strategies aimed at ameliorating or even preventing the onset of psychosis.