In schizophrenia, cognitive overload is thought to reflect an inability to suppress non-salient information, a process which is studied using prepulse inhibition (PPI) of the startle response. PPI is reduced in schizophrenia and routinely tested in animal models and preclinical trials of antipsychotic drugs. However, the underlying neuronal circuitry is not well understood. We used a novel genetic screen in larval zebrafish to reveal the molecular identity of neurons that are required for PPI in fish and mice. Ablation or optogenetic silencing of neurons with developmental expression of the transcription factor genomic screen homeobox 1 (gsx1) produced profound defects in PPI in zebrafish, and PPI was similarly impaired in Gsx1 knockout mice. Gsx1-expressing neurons reside in the dorsal brainstem and form synapses closely apposed to neurons that initiate the startle response. Surprisingly, brainstem Gsx1 neurons are primarily glutamatergic despite their role in a functionally inhibitory pathway. As Gsx1 has an important role in regulating interneuron development in the forebrain, these findings reveal a molecular link between control of interneuron specification and circuits that gate sensory information across brain regions.