One of the most consistent electrophysiological deficits reported in the schizophrenia literature is the failure to inhibit, or properly gate, the neuronal response to the second stimulus of an identical pair (i.e., sensory gating). Although animal and invasive human studies have consistently implicated the auditory cortex, prefrontal cortex and hippocampus in mediating the sensory gating response, localized activation in these structures has not always been reported during non-invasive imaging modalities. In the current experiment, event-related FMRI and a variant of the traditional gating paradigm were utilized to examine how the gating network differentially responded to the processing of pairs of identical and non-identical tones. Two single-tone conditions were also presented so that they could be used to estimate the HRF for paired stimuli, reconstructed based on actual hemodynamic responses, to serve as a control non-gating condition. Results supported an emerging theory that the gating response for both paired-tone conditions was primarily mediated by auditory and prefrontal cortex, with potential contributions from the thalamus. Results also indicated that the left auditory cortex may play a preferential role in determining the stimuli that should be inhibited (gated) or receive further processing due to novelty of information. In contrast, there was no evidence of hippocampal involvement, suggesting that future work is needed to determine what role it may play in the gating response.