Psychotomimetics like the N-methyl-D-aspartate receptor (NMDAR) antagonist ketamine and the 5-hydroxytryptamine2A receptor (5-HT(2A)R) agonist psilocybin induce psychotic symptoms in healthy volunteers that resemble those of schizophrenia. Recent theories of psychosis posit that aberrant encoding of prediction errors (PE) may underlie the expression of psychotic symptoms. This study used a roving mismatch negativity (MMN) paradigm to investigate whether the encoding of PE is affected by pharmacological manipulation of NMDAR or 5-HT(2A)R, and whether the encoding of PE under placebo can be used to predict drug-induced symptoms. Using a double-blind within-subject placebo-controlled design, S-ketamine and psilocybin, respectively, were administrated to two groups of healthy subjects. Psychological alterations were assessed using a revised version of the Altered States of Consciousness (ASC-R) questionnaire. As an index of PE, we computed changes in MMN amplitudes as a function of the number of preceding standards (MMN memory trace effect) during a roving paradigm. S-ketamine, but not psilocybin, disrupted PE processing as expressed by a frontally disrupted MMN memory trace effect. Although both drugs produced positive-like symptoms, the extent of PE processing under placebo only correlated significantly with the severity of cognitive impairments induced by S-ketamine. Our results suggest that the NMDAR, but not the 5-HT(2A)R system, is implicated in PE processing during the MMN paradigm, and that aberrant PE signaling may contribute to the formation of cognitive impairments. The assessment of the MMN memory trace in schizophrenia may allow detecting early phases of the illness and might also serve to assess the efficacy of novel pharmacological treatments, in particular of cognitive impairments.Neuropsychopharmacology advance online publication, 26 October 2011; doi:10.1038/npp.2011.261.