Background/Objectives: Prader–Willi Syndrome (PWS) is a neurodevelopmental disease associated with multiple behavioral features, including a prevalence for psychosis. The genetic causes of PWS are well characterized and involve the silencing or deletion of the paternal copy of a region of chromosome 15q11–13. One gene within this region, Snord116, a non-coding RNA, has been determined to have a determinant role in the manifestation of PWS. However, it remains unclear as to how the deletion of this allele can affect activity in the brain and influence psychosis-like behaviors. Methods: In this study, we assessed the effects of the microdeletion of the paternal copy of Snord116 on regional neural activity in psychosis-associated brain regions and psychosis-like behaviors in mice. Results: The results suggest that Snord116 deletion causes increased c-Fos expression in the hippocampus and anterior cingulate cortex. Snord116 deletion also results in behavioral phenotypes consistent with psychosis, most notably in stressful paradigms, with deficits in sensorimotor gating and augmented contextual as well as cued fear conditioning. Conclusions: These results implicate the targets of Snord116 in the presentation of a psychosis-like state with regional specificity.