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An imbalance between neuronal excitation and inhibition represents a core feature in multiple neuropsychiatry disorders, necessitating the development of novel strategies to calibrate the excitatory–inhibitory balance of therapeutics. Here we identify a natural compound quercetin that reduces prefrontal cortical GABAergic transmission and alleviates the hyperactivity induced by glutamatergic N-methyl-d-aspartate receptor antagonist MK-801. Quercetin markedly reduced the GABA-activated currents in a noncompetitive manner in cultured cortical neurons, and moderately inhibited spontaneous and electrically-evoked GABAergic inhibitory postsynaptic current in mouse prefrontal cortical slices. Notably, systemic and prefrontal-specific delivery of quercetin reduced basal locomotor activity in addition to alleviated the MK-801-induced hyperactivity. The effects of quercetin were not exclusively dependent on α5-subunit-containing A type GABA receptors (GABAARs), as viral-mediated, region-specific genetic knockdown of the α5-subunit in prefrontal cortex improved the MK-801-evoked psychotic symptom but reserved the pharmacological responsivity to quercetin. Both interventions together completely normalized the locomotor activity. Together, quercetin as a negative allosteric GABAAR modulator exerted antipsychotic activity, facilitating further therapeutic development for the excitatory–inhibitory imbalance disorders. Keywords: Antipsychotic, Excitatory–inhibitory imbalance disorders, GABAAR, Prefrontal transmission, Quercetin