Schizophrenia is mostly a progressive psychiatric illness. Although cognitive changes in chronic schizophrenia have been investigated, little is known about the consequences of a single psychotic episode on memory mechanisms and formation. We investigated changes in hippocampal long-term potentiation (LTP) and spatial memory in a rat model of an acute psychotic episode. Application of NMDA receptor antagonists, such as MK801 (dizolcilpine) in rats, have been shown to give rise to an acute and short-lasting behavioral state, which mirrors many symptoms of schizophrenia. Furthermore, NMDA antagonist-intake in humans elicits symptoms of schizophrenia such as hallucinations, delusions, and affective blunting. We therefore treated animals with a single systemic injection of MK801 (5 mg/kg). Increased stereotypy, locomotion, and ataxia were evident immediately after MK801-treatment, with effects disappearing within 24 h. MK801-treatment caused a disruption of prepulse inhibition of the acoustic startle reflex, 1 day but not 7 or 28 days after treatment. These effects were consistent with the occurrence of an acute psychotic episode. LTP was profoundly impaired in freely moving rats 7 days after MK801 application. Four weeks after treatment, a slight recovery of LTP was seen, however marked deficits in long-term spatial memory were evident. These data suggest that treatment with MK801 to generate an acute psychotic episode in rats, gives rise to grave disturbances in synaptic plasticity and is associated with lasting impairments with the ability to form spatial memory.