Deficits in prepulse inhibition (PPI) are thought to be a biological trait of mental illnesses, including schizophrenia. It is known that the N-methyl-D-aspartate type glutamate (NMDA) receptor function affects PPI integrity and D-serine and glycine are typical endogenous co-agonists for the receptor. In parallel, we re-visited our prior quantitative trait loci (QTL) analysis study that examined C57BL/6 (B6) mice with high PPI and C3H/He (C3) with low PPI, and noticed that the genes encoding enzymes responsible for the productions of D-serine (serine racemase: Srr) and glycine (serine hydroxymethyltransferase 1: Shmt1) map to the chromosome 11 QTL. Therefore, we set out to examine whether brain interstitial fluid (ISF) levels of the two amino acids are different between the two mouse strains, using in vivo microdialysis. Recovery of D-serine and glycine from the dialysate of the frontal cortex was higher in B6 mice, which performed better in PPI, compared to C3 mice. Next, we analyzed the two genes, Srr and Shmt1. We then identified promoter polymorphisms in Shmt1 which elicit lower transcriptional activity in B6 compared to C3 mice. Human studies revealed higher expression levels of SHMT1 in the frontal cortex of postmortem brains from schizophrenics compared to controls, but no changes in SRR levels. In addition, genetic analysis detected a nominal association between SHMT1 and schizophrenia. These results suggest that Shmt1 (SHMT1) is one of the genetic components regulating PPI in mice and is relevant to schizophrenia susceptibility in humans.