Two psychophysiological measures, poor suppression of midlatency auditory-evoked responses in a paired stimulus paradigm and ocular motor abnormalities, may index genetic liability for schizophrenia. An important feature of these measures is that both patients and their nonpsychotic relatives exhibit basically the same performance. These measures may be successful endophenotypes for schizophrenia because they assess poor response inhibition associated with dysfunction of dorsolateral prefrontal cortex circuitry. Data bearing on this hypothesis are reviewed, and it is posited that assessment of the auditory-evoked gamma band response and saccade measures of inhibitory abilities are the most valid behavioral measures of schizophrenia's neuropathological correlates. The extant data suggest that psychophysiological studies of schizophrenia can provide consistent and theoretically meaningful information for localizing neuropathology and for assessing the genetics of this complex disorder.