We investigated the longstanding idea that the onset of psychotic symptoms in schizophrenia arises from an early phase of glutamate neurotoxicity, possibly related to loss of GABA restraint, oxidative stress or inflammation, that cumulatively results in a later phase of synaptic loss in keeping with magnetic resonance spectroscopy (MRS) evidence of reduced glutamate in schizophrenia, especially in older patients. We evaluated this hypothesis in a 3-centre MRS study to determine whether abnormalities in glutamate in dorsal anterior cingulate cortex (dACC) differed between people with minimally treated ‘Recent’ onset schizophrenia and an ‘Established’ group with > 10 years of illness. We tested the hypothesised mechanisms of reduced GABA in either or both dACC and occipital cortex, and depletion of dACC glutathione, a measure of central inflammation. We explored predicted associations between MRS variables, circulating cytokines and clinical symptoms. The Established group showed significantly greater dACC glutamate deficit than the Recent group which was not accounted for by lifetime exposure to antipsychotic drugs or by their greater CRP or IL-6 levels nor was the deficit associated with glutathione depletion. The greater dACC glutamate deficit in established illness is compatible with loss of synapses occurring after onset of symptoms but there was little to suggest underpinning excitotoxicity, inflammation, or oxidative stress. GABA was reduced in patients versus controls across dACC and occipital voxels. Only dACC GABA content correlated significantly with symptoms, lower content with greater positive and negative symptoms across both groups and this is supportive of a pathophysiological role of GABA in psychosis.