Prepulse inhibition (PPI) of the startle reflex provides an operational measure of sensorimotor gating. Deficits in PPI are observed in schizophrenia patients and can be modelled in animals by administration of noncompetitive NMDA antagonists such as phencyclidine (PCP) or dizocilpine (MK-801). Previous studies indicate that the atypical antipsychotic clozapine restores PPI in PCP-treated animals while the typical antipsychotic haloperidol does not. Olanzapine (LY170053) is a novel putative atypical antipsychotic that shares many pharmacological and behavioral properties with clozapine. The present study assessed the ability of olanzapine (0, 1.25, 2.5, 5.0 or 10.0 mg/kg) to antagonize deficits in PPI produced by PCP (1.5 mg/kg) and dizocilpine (0.1 mg/kg). At the two highest doses, olanzapine significantly increased PPI in PCP- and dizocilpine-treated animals without affecting PPI or baseline startle reactivity by itself. These results support the notion that olanzapine is functionally similar to clozapine and may have utility as an atypical antipsychotic agent.