In schizophrenia, glutamic acid decarboxylase 1 (GAD1) disturbances are robust, consistently observed, cell-type specific and represent a core feature of the disease. In addition, neuropeptide Y (NPY), which is a phenotypic marker of a sub-population of GAD1-containing interneurons, has shown reduced expression in the prefrontal cortex in subjects with schizophrenia, suggesting that dysfunction of the NPY+ cortical interneuronal sub-population might be a core feature of this devastating disorder. However, modeling gene expression disturbances in schizophrenia in a cell type-specific manner has been extremely challenging. To more closely mimic these molecular and cellular human post-mortem findings, we generated a transgenic mouse in which we downregulated GAD1 mRNA expression specifically in NPY+ neurons. This novel, cell type-specific in vivo system for reducing gene expression uses a bacterial artificial chromosome (BAC) containing the NPY promoter-enhancer elements, the reporter molecule (eGFP) and a modified intron containing a synthetic microRNA (miRNA) targeted to GAD1. The animals of isogenic strains are generated rapidly, providing a new tool for better understanding the molecular disturbances in the GABAergic system observed in complex neuropsychiatric disorders such as schizophrenia. In the future, because of the small size of the silencing miRNAs combined with our BAC strategy, this method may be modified to allow generation of mice with simultaneous silencing of multiple genes in the same cells with a single construct, and production of splice-variant-specific knockdown animals.