N-methyl-d-aspartate (NMDA) receptor hypofunction is believed to comprise a central factor in the cognitive symptoms of psychotic illnesses such as schizophrenia. In the MK801 model of psychosis in rats, NMDA hypofunction also occurs, and animals display a profound impairment of both hippocampus-dependent learning and synaptic plasticity. The NMDA receptor may thus comprise a useful target for therapeutic amelioration of the symptoms of psychosis. However, direct activation of the receptor could lead to disturbed synaptic information storage. One possibility, however, is to enhance NMDA receptor function indirectly through elevation of glycine levels. We investigated the effects of inhibition of the glycine transporter-1, GlyT1, on long-term potentiation (LTP) and long-term depression (LTD) in the dentate gyrus of freely behaving rats that had been treated previously with MK801. LTP, but not LTD, was impaired in MK801-treated animals. Systemic application of the GlyT1-inhibitor N[3-(4’-flurophenyl)-3-(4’-phenylphenoxy) propyl]sarcosine (NFPS) rescued LTP but had no effect on LTD in MK801-treated animals. Application of the antagonist to vehicle-treated controls resulted in a disruption of LTP but not LTD. NFPS significantly ameliorated reference memory deficits in a radial maze that occurred following MK801 treatment. NFPS-treated controls performed less well, however, than vehicle-injected controls. These data support that treatment with a glycine transporter inhibitor can ameliorate deficits in both LTP and learning that occur in a rat model of psychosis, and may therefore prove a useful strategy to address cognitive disruption in psychotic illnesses. Use of the inhibitor in healthy subjects is neither beneficial to synaptic plasticity nor hippocampus-dependent learning.