Autophagy plays an essential role in intracellular degradation and maintenance of cellular homeostasis in all cells, including neurons. Although a recent study reported a copy number variation of Ulk2, a gene essential for initiating autophagy, associated with a case of schizophrenia (SZ), it remains to be studied whether Ulk2 dysfunction could underlie the pathophysiology of the disease. Here we show that Ulk2 heterozygous (Ulk2+/-) mice have upregulated expression of sequestosome-1/p62, an autophagy-associated stress response protein, predominantly in pyramidal neurons of the prefrontal cortex (PFC), and exhibit behavioral deficits associated with the PFC functions, including attenuated sensorimotor gating and impaired cognition. Ulk2+/- neurons showed imbalanced excitatory-inhibitory neurotransmission, due in part to selective down-modulation of gamma-aminobutyric acid (GABA)A receptor surface expression in pyramidal neurons. Genetically reducing p62 gene dosage or suppressing p62 protein levels with an autophagy-inducing agent restored the GABAA receptor surface expression and rescued the behavioral deficits in Ulk2+/- mice. Moreover, expressing a short peptide that specifically interferes with the interaction of p62 and GABAA receptor-associated protein, a protein that regulates endocytic trafficking of GABAA receptors, also restored the GABAA receptor surface expression and rescued the behavioral deficits in Ulk2+/- mice. Thus, the current study reveals a novel mechanism linking deregulated autophagy to functional disturbances of the nervous system relevant to SZ, through regulation of GABAA receptor surface presentation in pyramidal neurons.