Latent inhibition (LI) consists in a retardation of conditioning seen when the to-be-conditioned stimulus is first presented a number of times without other consequence. Disruption of LI has been proposed as a possible model of the cognitive abnormality that underlies the positive psychotic symptoms of acute schizophrenia. We review here evidence in support of the model, including experiments tending to show that: (1) disruption of LI is characteristic of acute, positively-symptomatic schizophrenia; (2) LI depends upon dopaminergic activity; (3) LI depends specifically upon dopamine release in n. accumbens; (4) LI depends upon the integrity of the hippocampal formation and the retrohippocampal region reciprocally connected to the hippocampal formation; (5) the roles of n. accumbens and the hippocampal system in LI are interconnected.