Schizophrenia is widely regarded to be a neurocognitive disorder, i.e. a dysfunction of the neural and cognitive systems subserving thinking and reasoning, memory, language, attention and perception. However, although cognitive dysfunction is certainly a cardinal feature of schizophrenia, we argue that dysfunction of emotional brain systems may be even more important in understanding the disorder. Indeed, in recent years research on the emotional aspects of schizophrenia is accumulating at a high rate. Here, we review the available evidence regarding behavioral and neural manifestations of abnormal emotional systems in schizophrenia. This evidence comes from patient studies using tasks of emotion recognition, emotional expression and emotional experience. Furthermore, studies of schizophrenia patients using structural MRI have demonstrated volume reductions of the amygdala, a key structure of the emotional brain. Finally, functional fMRI studies have revealed an attenuated response of the amygdala to emotional stimuli as compared to neutral stimuli. Beyond demonstrating that dysfunction of the emotional brain is a hallmark of schizophrenia, we propose a model that integrates previous neural accounts of emotional abnormalities in schizophrenia, and specifies a neural basis for differential emotional correlates of positive and negative symptoms. Specifically, a lesion to the amygdala in combination with reduced interconnectivity with the prefrontal cortex is hypothesized to give rise to reduced emotional expression (affective flattening) and emotion recognition deficits. In contrast, an imbalance in dopamine systems may underlie increased anxiety and autonomic arousal, and the assignment of emotional salience to insignificant stimuli, associated with psychosis. We also hypothesize that the central and basolateral nuclei of the amygdala may contribute differentially to these abnormalities.