N-methyl-D-aspartate receptors (NMDARs) play a pivotal role in excitatory neurotransmission, synaptic plasticity and brain development. Clinical and experimental evidence suggests a dysregulation of NMDAR function and glutamatergic pathways in the pathophysiology of schizophrenia. We evaluated electrophysiological and behavioral properties of NMDAR deficiency utilizing mice that express only 5–10% of the normal level of NMDAR NR1 subunit. Auditory and visual event related potentials yielded significantly increased amplitudes for the P20 and N40 components in NMDAR deficient (NR1neo−/−) mice suggesting decreased inhibitory tone. Compared to wild types, NR1neo−/− mice spent less time in social interactions and showed reduced nest building. NR1neo−/− mice displayed a preference for open arms of a zero maze and central zone of an open field, possibly reflecting decreased anxiety-related behavioral inhibition. However, locomotor activity did not differ between groups in either home cage environment or during behavioral testing. NR1neo−/− mice displayed hyperactivity only when placed in a large unfamiliar environment, suggesting that neither increased anxiety nor non-specific motor activation accounts for differential behavioral patterns. Data suggest that NMDAR NR1 deficiency causes disinhibition in sensory processing as well as reduced behavioral inhibition and impaired social interactions. The behavioral signature in NR1neo−/− mice supports the impact of impaired NMDAR function in a mouse model with possible relevance to negative symptoms in schizophrenia.