Hyperactivity within the ventral hippocampus (vHPC) has been linked to both psychosis in humans and behavioral deficits in animal models of schizophrenia. A local decrease in GABA-mediated inhibition, particularly involving parvalbumin (PV)-expressing GABA neurons, has been proposed as a key mechanism underlying this hyperactive state. However, direct evidence is lacking for a causal role of vHPC GABA neurons in behaviors associated with schizophrenia. Here, we probed the behavioral function of two different but overlapping populations of vHPC GABA neurons that express either PV or GAD65 by selectively inhibiting these neurons with the pharmacogenetic neuromodulator hM4D. We show that acute inhibition of vHPC GABA neurons in adult mice results in behavioral changes relevant to schizophrenia. Inhibiting either PV or GAD65 neurons produced distinct behavioral deficits. Inhibition of PV neurons, affecting ∼80% of the PV neuron population, robustly impaired prepulse inhibition of the acoustic startle reflex (PPI), startle reactivity, and spontaneous alternation, but did not affect locomotor activity. In contrast, inhibiting a heterogeneous population of GAD65 neurons, affecting ∼40% of PV neurons and 65% of cholecystokinin neurons, increased spontaneous and amphetamine-induced locomotor activity and reduced spontaneous alternation, but did not alter PPI. Inhibition of PV or GAD65 neurons also produced distinct changes in network oscillatory activity in the vHPC in vivo. Together, these findings establish a causal role for vHPC GABA neurons in controlling behaviors relevant to schizophrenia and suggest a functional dissociation between the GABAergic mechanisms involved in hippocampal modulation of sensorimotor processes.