Patients with schizophrenia have deficient sensory processing, undermining how they perceive and relate to a changing environment. This impairment can be captured by the reduced mismatch negativity (MMN) index, an electroencephalographic biomarker of psychosis. The biological factors contributing to MMN are unclear, though mouse research, in which genetic and optical methods could be applied, has given some insight. Using fast two-photon calcium imaging and multielectrode recordings in awake mice, we find that visual cortical circuits display adapted (decreased) responses to repeated stimuli and amplified responses to a deviant stimulus, the key component of human MMN. Moreover, pharmacogenetic silencing of somatostatin-containing interneurons specifically eliminated this amplification, along with its associated theta/alpha-band response, leaving stimulus-specific adaption and related gamma-band modulations intact. Our results validate a mouse model of MMN and suggest that abnormalities in somatostatin-containing interneurons cause sensory deficits underlying MMN and schizophrenia.