Background: Many studies have announced that P50 inhibition defects represent sensory gating deficits in schizophrenia, but studies seldom have searched the correlation between P50 inhibition defects and the psychopathology or cognitive impairment of patients with first-episode, drug naive (FEDN) of schizophrenia. In this study, we investigated the auditory sensory gating deficits in a large number of Han patients with FEDN schizophrenia and their correlation with clinical symptoms and cognitive impairment. Methods: A total of 130 patients with FEDN schizophrenia and 189 healthy controls were recruited in this study. Positive and Negative Syndrome Scale (PANSS) and its five-factor model were used to score the psychopathology of the patients, and P50 inhibition was recorded using the 64-channel electroencephalography (EEG) system. Results: Patients exhibited significantly longer S1 and S2 latency, lower S1 and S2 amplitudes and lower P50 difference than healthy controls (all p < 0.05). Significant correlations existed between S1 latency and PANSS negative symptoms or cognitive factor, P50 ratio and general psychopathology, P50 ratio and PANSS total score, P50 difference and general psychopathology, and P50 difference and PANSS total score (all p < 0.05). Multiple regression analysis revealed that S1 latency, sex, age, and education were contributors to negative symptom score (all p < 0.05). S1 latency, S2 latency, sex, age, and smoking status were contributors to cognitive factor (all p < 0.05). Conclusions: Our results show that patients with FEDN schizophrenia have P50 inhibition defects, which may be related to their psychopathological symptoms and cognitive impairment.