This study analyzed whether the positive allosteric modulator of metabotropic glutamate receptor type 5 (mGlu5) 3-Cyano-N-(1,3-diphenyl-1H-pyrazol-5-yl) benzamide (CDPPB) would alleviate deficits in prepulse inhibition (PPI) and affect dopamine (DA) D2 signaling in the dorsal striatum and prefrontal cortex (PFC) in the neonatal quinpirole (NQ) model of schizophrenia (SZ). Male and female Sprague-Dawley rats were neonatally treated with either saline (NS) or quinpirole HCL (1 mg/kg; NQ), a DAD2 receptor agonist, from postnatal days (P) 1–21. Rats were raised to P44 and behaviorally tested on PPI from P44-P48. Before each trial, rats were subcutaneous (sc) administered saline or CDPPB (10 mg/kg or 30 mg/kg). On P50, rats were given a spontaneous locomotor activity test after CDPPB or saline administration. On P51, the dorsal striatum and PFC were evaluated for both arrestin-2 (βA-2) and phospho-AKT protein levels. NQ-treated rats demonstrated a significant deficit in PPI, which was alleviated to control levels by the 30 mg/kg dose of CDPPB. There were no significant effects of CDPPB on locomotor activity. NQ treatment increased βA-2 and decreased phospho-AKT in both the dorsal striatum and PFC, consistent with an increase DAD2 signaling. The 30 mg/kg dose of CDPPB significantly reversed changes in βA-2 in the dorsal striatum and PFC and phospho-AKT in the PFC equivalent to controls. Both doses of CDPPB produced a decrease of phospho-AKT in the PFC compared to controls. This study revealed that a mGlu5 positive allosteric modulator was effective to alleviate PPI deficits and striatal DAD2 signaling in the NQ model of SZ.