Impaired social functioning is pervasive in schizophrenia. Unfortunately, existing treatments have limited efficacy, and possible psychological or neurobiological mechanisms underlying social dysfunction in this disorder remain obscure. Here, we evaluate whether social preference, one key aspect of social processing that has been largely overlooked in schizophrenia research, and N-methyl-D-aspartate receptor (NMDAR) dysfunction can provide insights into the mechanism underlying social dysfunction in schizophrenia. Based on evidence from developmental psychology, and behavioral and clinical neuroscience, we propose a heuristic model in which reduced NMDAR function may induce disrupted social preference that can subsequently lead to social cognitive impairment and social disability. We discuss its implications in terms of the pathophysiology of schizophrenia, other disorders with marked social disability, and potential treatments.