The interpretation of proverbs has a long tradition in the assessment of abstract thinking, particularly in schizophrenia. Although the usefulness of proverb interpretation as a diagnostic tool has been questioned over the years, the comprehension of non-literal language nevertheless plays an important role in social interactions. Thus, researchers remain interested in the neurocognitive mechanisms mediating comprehension and use of figurative language. The present paper summarizes and evaluates the evidence from behavioral, lesion and imaging studies including data for compromised figurative language processing derived from clinical populations. One main focus is on studies of figurative language comprehension in schizophrenia. Several theoretical explanations proposed to account for the difficulties schizophrenia patients experience when confronted with figurative language will be addressed. An integration of the evidence from different areas of research is attempted and directions for future investigation are outlined.