The cellular pathology of schizophrenia and the potential of antipsychotics to target underlying neuronal dysfunctions are still largely unknown. We employed glutamatergic neurons derived from induced pluripotent stem cells (iPSC) obtained from schizophrenia patients with known histories of response to clozapine and healthy controls to decipher the mechanisms of action of clozapine, spanning from molecular (transcriptomic profiling) and cellular (electrophysiology) levels to observed clinical effects in living patients. Glutamatergic neurons derived from schizophrenia patients exhibited deficits in intrinsic electrophysiological properties, synaptic function and network activity. Deficits in K+ and Na+ currents, network behavior, and glutamatergic synaptic signaling were restored by clozapine treatment, but only in neurons from clozapine-responsive patients. Moreover, neurons from clozapine-responsive patients exhibited a reciprocal dysregulation of gene expression, particularly related to glutamatergic and downstream signaling, which was reversed by clozapine treatment. Only neurons from clozapine responders showed return to normal function and transcriptomic profile. Our results underscore the importance of K+ and Na+ channels and glutamatergic synaptic signaling in the pathogenesis of schizophrenia and demonstrate that clozapine might act by normalizing perturbances in this signaling pathway. To our knowledge this is the first study to demonstrate that schizophrenia iPSC-derived neurons exhibit a response phenotype correlated with clinical response to an antipsychotic. This opens a new avenue in the search for an effective treatment agent tailored to the needs of individual patients.