Cannabis use can induce acute psychotic symptoms and increase the risk of schizophrenia. Impairments in inhibitory control and processing are known to occur both under the influence of cannabis and in schizophrenia. Whether cannabis-induced impairment in inhibitory processing is related to the acute induction of psychotic symptoms under its influence is unclear. We investigated the effects of acute oral administration of 10mg of delta-9-tetrahydrocannabinol (delta-9-THC), the main psychoactive ingredient of cannabis, on inhibitory control and regional brain activation during inhibitory processing in humans and examined whether these effects are related to the induction of psychotic symptoms under its influence using a repeated-measures, placebo-controlled, double-blind, within-subject design. We studied thirty-six healthy, English-speaking, right-handed men with minimal previous exposure to cannabis and other illicit drugs twice using functional magnetic resonance imaging (fMRI) while they performed a response inhibition (Go/No-Go) task. Relative to placebo, delta-9-THC caused transient psychotic symptoms, anxiety, intoxication and sedation, inhibition errors and impaired inhibition efficiency. Severity of psychotic symptoms was directly correlated with inhibition error frequency and inversely with inhibition efficiency under the influence of delta-9-THC. Delta-9-THC attenuated left inferior frontal activation which was inversely correlated with the frequency of inhibition errors and severity of psychotic symptoms and positively with inhibition efficiency under its influence. These results provide experimental evidence that impairments in cognitive processes involved in the inhibitory control of thoughts and actions and inferior frontal function under the influence of cannabis may have a role in the emergence of transient psychotic symptoms under its influence.