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Abnormal gamma-band oscillations (GBO) have been frequently associated with the pathophysiology of schizophrenia. GBO are modulated by glutamate, a neurotransmitter, which is continuously discussed to shape the complex symptom spectrum in schizophrenia. The current study examined the effects of ketamine, a glutamate N-methyl-d-aspartate receptor (NMDAR) antagonist, on the auditory-evoked gamma-band response (aeGBR) and psychopathological outcomes in healthy volunteers to investigate neuronal mechanisms of psychotic behavior. In a placebo-controlled, randomized crossover design, the aeGBR power, phase-locking factor (PLF) during a choice reaction task, the Positive and Negative Syndrome Scale (PANSS) and the Altered State of Consciousness (5D-ASC) Rating Scale were assessed in 25 healthy subjects. Ketamine was applied in a subanaesthetic dose. Low-resolution brain electromagnetic tomography was used for EEG source localization. Significant reductions of the aeGBR power and PLF were identified under ketamine administration compared to placebo (p < 0.01). Source-space analysis of aeGBR generators revealed significantly reduced current source density (CSD) within the anterior cingulate cortex during ketamine administration. Ketamine induced an increase in all PANSS (p < 0.001) as well as 5D-ASC scores (p < 0.01) and increased response times (p < 0.001) and error rates (p < 0.01). Only negative symptoms were significantly associated with an aeGBR power decrease (p = 0.033) as revealed by multiple linear regression. These findings argue for a substantial role of the glutamate system in the mediation of dysfunctional gamma band responses and negative symptomatology of schizophrenia and are compatible with the NMDAR hypofunction hypothesis of schizophrenia.