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OBJECTIVE: It has been suggested that increased variability of prefrontal physiological responses may represent a fundamental mechanism underlying frontal lobe deficits in schizophrenia. Increased response variability (“noise”) is thought to result from impaired phase resetting of stimulus-induced dynamic changes of ongoing rhythmic oscillations (field potentials) generated in the apical dendrites of pyramidal neurons. In the present study, the authors explored whether this particular physiological abnormality predicts working memory performance and is related to the genetic risk for schizophrenia. METHOD: Prefrontal response variability of discrete frequency components was investigated across a broad frequency range (0.5–45.0 Hz) during processing of an oddball paradigm in patients with schizophrenia (N=66), their clinically unaffected siblings (N=115), and healthy comparison subjects (N=89). RESULTS: As hypothesized, prefrontal noise was negatively correlated with working memory performance across all subjects. In addition, it was observed that prefrontal noise possesses trait characteristics and is strongly associated with genetic risk for schizophrenia. CONCLUSIONS: Frontal lobe-related cognitive function depends on the ability to synchronize cortical pyramidal neurons, which is in part genetically controlled. Increased prefrontal “noise” is an intermediate phenotype related to genetic susceptibility for schizophrenia.