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OBJECTIVE: Multiplex schizophrenia families from Palau, Micronesia, were assessed with P50 sensory gating to 1) test for replication of the association between this inhibitory neurobiological trait and familial schizophrenia in non-Caucasian subjects and 2) evaluate the ability of the P50 trait to serve as an endophenotype in a genetic linkage study of these families. METHOD: A paired-stimulus auditory event- related potential paradigm was used to examine P50 sensory gating in 85 schizophrenia patients (56 medicated with typical antipsychotics and 29 unmedicated), 83 of their first-degree relatives (46 parents and 37 siblings), and 29 normal comparison subjects. RESULTS: Auditory sensory gating as measured by the P50 ratio was similarly impaired in medicated and unmedicated schizophrenia patients compared to the normal subjects, and medication dose had no significant effect on any P50 variable. This impairment extended to first-degree relatives, who also showed significantly higher P50 ratios than the normal subjects. Abnormal P50 ratios were found in 64.7% of the schizophrenia patients and 51.8% of their first-degree relatives but only 10.3% of the normal subjects. CONCLUSIONS: P50 sensory gating deficits were confirmed in Palauan schizophrenia families. Rates of abnormal P50 sensory gating in relatives versus normal subjects resulted in a risk ratio of 5.0. Impairment was independent of medication effects, indicating that the P50 paradigm measures a stable neurobiological trait unaffected by treatment with typical antipsychotics. These results suggest that this trait can fulfill the major criteria for an endophenotype for genetic liability to schizophrenia in these multiply affected Palauan families.