NMDA receptor dysfunction has been proposed as a mechanism in psychosis. This theory is reinforced by the fact that dissociative NMDA receptor antagonists such as ketamine, PCP and dextromethorphan (at large overdoses) induce a psychotic state. The symptoms of dissociative intoxication are also considered to mirror the symptoms of schizophrenia, including negative symptoms. NMDA receptor antagonism, in addition to producing symptoms reminiscent of psychosis, mimics the neurophysiological aspects, such as reduction in the amplitude of P50, P300, and MMN evoked potentials. Hierarchical Bayesian neurocomputational models of sensory feedback, in agreement with neuroimaging literature, link NMDA receptor hypofunction to delusional or hallucinatory symptoms via proposing a failure of NMDA mediated top down predictions to adequately cancel out enhanced bottom up AMPA mediated predictions errors. Excessive prediction errors in response to stimuli that would normally not produce such a response is thought to root from conferring excessive salience to otherwise mundane events. Dysfunction higher up in the hierarchy, where representation is more abstract, could result in delusions. The common finding of reduced GAD67 expression in psychotic disorders may explain enhanced AMPA mediated signaling, caused by reduced GABAergic inhibition.