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Abstract The hypothesis of N-methyl-D-aspartate receptor (NMDAR) dysfunction for cognitive impairment in schizophrenia constitutes the theoretical basis for the translational application of NMDAR co-agonist D-serine or its analogs. However, the cellular mechanism underlying the therapeutic effect of D-serine remains unclear. In this study, we utilize a mouse neurodevelopmental model for schizophrenia that mimics prenatal pathogenesis and exhibits hypoexcitability of parvalbumin-positive (PV) neurons, as well as PV-preferential NMDAR dysfunction. We find that D-serine restores excitation/inhibition balance by reconstituting both synaptic and intrinsic inhibitory control of cingulate pyramidal neurons through facilitating PV excitability and activating small-conductance Ca2+-activated K+ (SK) channels in pyramidal neurons, respectively. Either amplifying inhibitory drive via directly strengthening PV neuron activity or inhibiting pyramidal excitability via activating SK channels is sufficient to improve cognitive function in this model. These findings unveil a dual mechanism for how D-serine improves cognitive function in this model.