The mechanisms by which prenatal immune activation increase the risk for neuropsychiatric disorders are unclear. Here, we generated developmental cortical interneurons (cINs)-which are known to be affected in schizophrenia (SCZ) when matured-from induced pluripotent stem cells (iPSCs) derived from healthy controls (HCs) and individuals with SCZ and co-cultured them with or without activated microglia. Co-culture with activated microglia disturbed metabolic pathways, as indicated by unbiased transcriptome analyses, and impaired mitochondrial function, arborization, synapse formation and synaptic GABA release. Deficits in mitochondrial function and arborization were reversed by alpha lipoic acid and acetyl-L-carnitine treatments, which boost mitochondrial function. Notably, activated-microglia-conditioned medium altered metabolism in cINs and iPSCs from HCs but not in iPSCs from individuals with SCZ or in glutamatergic neurons. After removal of activated-microglia-conditioned medium, SCZ cINs but not HC cINs showed prolonged metabolic deficits, which suggests that there is an interaction between SCZ genetic backgrounds and environmental risk factors.