A critical component of cognitive impairments in schizophrenia can be characterized as a disturbance in cognitive control, or the ability to guide and adjust cognitive processes and behavior flexibly in accordance with one's intentions and goals. Cognitive control impairments in schizophrenia are consistently linked to specific disturbances in prefrontal cortical functioning, but the underlying neurophysiologic mechanisms are not yet well characterized. Synchronous γ-band oscillations have been associated with a wide range of perceptual and cognitive processes, raising the possibility that they may also help entrain prefrontal cortical circuits in the service of cognitive control processes. In the present study, we measured induced γ-band activity during a task that reliably engages cognitive control processes in association with prefrontal cortical activations in imaging studies. We found that higher cognitive control demands were associated with increases in induced γ-band activity in the prefrontal areas of healthy subjects but that control-related modulation of prefrontal γ-band activity was absent in schizophrenia subjects. Disturbances in γ-band activity in patients correlated with illness symptoms, and γ-band activity correlated positively with performance in control subjects but not in schizophrenia patients. Our findings may provide a link between previously reported postmortem abnormalities in thalamofrontocortical circuitry and alterations in prefrontal activity observed in functional neuroimaging studies. They also suggest that deficits in frontal cortical γ-band synchrony may contribute to the cognitive control impairments in schizophrenia.