Extracting relevant information and transforming it into appropriate behavior, is a fundamental brain function, and requires the coordination between the sensory and cognitive systems, however, the underlying mechanisms of interplay between sensory and cognition systems remain largely unknown. Here, we developed a mouse model for mimicking human auditory mismatch negativity (MMN), a well-characterized translational biomarker for schizophrenia, and an index of early auditory information processing. We found that a subanesthetic dose of ketamine decreased the amplitude of MMN in adult mice. Using pharmacological and chemogenetic approaches, we identified an auditory cortex–entorhinal cortex–hippocampus neural circuit loop that is required for the generation of MMN. In addition, we found that inhibition of dCA1→MEC circuit impaired the auditory related fear discrimination. Moreover, we found that ketamine induced MMN deficiency by inhibition of long-range GABAergic projection from the CA1 region of the dorsal hippocampus to the medial entorhinal cortex. These results provided circuit insights for ketamine effects and early auditory information processing. As the entorhinal cortex is the interface between the neocortex and hippocampus, and the hippocampus is critical for the formation, consolidation, and retrieval of episodic memories and other cognition, our results provide a neural mechanism for the interplay between the sensory and cognition systems. [Display omitted] • The auditory cortex–entorhinal cortex–hippocampus neural circuit loop is required for the generation of MMN. • Disruption of dCA1→MEC projections impaired the auditory-related fear discrimination. • The long-range GABAergic projections from the dCA1 to the MEC are essential for the generation of MMN. • Ketamine induces MMN deficiency via inhibiting long-range GABAergic projections of dCA1→MEC. • The auditory cortex-entorhinal cortex-hippocampus neural circuit loop acts as the interface between sensory and cognition systems. [ABSTRACT FROM AUTHOR]