Schizophrenia is considered primarily as a cognitive disorder. However, functional outcomes in schizophrenia are limited by the lack of effective pharmacological and psychosocial interventions for cognitive impairment. GABA (gamma-aminobutyric acid) interneurons are the main inhibitory neurons in the central nervous system (CNS), and they play a critical role in a variety of pathophysiological processes including modulation of cortical and hippocampal neural circuitry and activity, cognitive function-related neural oscillations (eg, gamma oscillations) and information integration and processing. Dysfunctional GABA interneuron activity can disrupt the excitatory/inhibitory (E/I) balance in the cortex, which could represent a core pathophysiological mechanism underlying cognitive dysfunction in schizophrenia. Recent research suggests that selective modulation of the GABAergic system is a promising intervention for the treatment of schizophrenia-associated cognitive defects. In this review, we summarized evidence from postmortem and animal studies for abnormal GABAergic neurotransmission in schizophrenia, and how altered GABA interneurons could disrupt neuronal oscillations. Next, we systemically reviewed a variety of up-to-date subtype-selective agonists, antagonists, positive and negative allosteric modulators (including dual allosteric modulators) for α5/α3/α2 GABAA and GABAB receptors, and summarized their pro-cognitive effects in animal behavioral tests and clinical trials. Finally, we also discuss various representative histone deacetylases (HDAC) inhibitors that target GABA system through epigenetic modulations, GABA prodrug and presynaptic GABA transporter inhibitors. This review provides important information on current potential GABA-associated therapies and future insights for development of more effective treatments.