Background: Converging evidence from neuroimaging and postmortem studies suggests that hippocampal subfields are differentially affected in schizophrenia. Recent studies report dentate gyrus dysfunction in chronic schizophrenia, but the underlying mechanisms remain to be elucidated. Here, we sought to examine if this deficit is already present in first-episode psychosis and if NMDA receptor hypofunction, a putative central pathophysiological mechanism in schizophrenia, experimentally induced by ketamine, would result in a similar abnormality. Methods: We applied a mnemonic discrimination task selectively taxing pattern separation in two experiments: 1) a group of 23 patients with first-episode psychosis and 23 matched healthy volunteers and 2) a group of 19 healthy volunteers before and during a ketamine challenge (0.27 mg/kg over 10 min, then 0.25 mg/kg/hour for 50 min, 0.01 mL/s). We calculated response bias–corrected pattern separation and recognition scores. We also examined the relationships between task performance and symptom severity as well as ketamine levels. Results: We reported a deficit in pattern separation performance in patients with first-episode psychosis compared with healthy volunteers (p = .04) and in volunteers during the ketamine challenge compared with baseline (p = .003). Pattern recognition was lower in patients with first-episode psychosis than in control subjects (p < .01). Exploratory analyses revealed no correlation between task performance and Repeatable Battery for the Assessment of Neuropsychological Status total scores or positive symptoms in patients with first-episode psychosis or with ketamine serum levels. Conclusions: We observed a mnemonic discrimination deficit in both datasets. Our findings suggest a tentative mechanistic link between dentate gyrus dysfunction in first-episode psychosis and NMDA receptor hypofunction.