Event-related potentials (ERPs), mostly P3, were measured in 20 schizophrenia and 20 healthy control subjects, in order to determine whether patients with schizophrenia have greater impairment in the processing of negative emotions. Study subjects were instructed to feel and respond to rare targets of facial photographs placed between frequent nontarget checkerboards. We found that P3 amplitudes associated with negative emotional photographs, in normal controls, were significantly larger than those of positive stimuli. Unlike the controls, in patients with schizophrenia, P3 amplitudes generated by negative emotional targets were significantly smaller than those of positive stimuli. We conclude that schizophrenia patients might be neurophysiologically different from healthy controls in terms of the manner in which they process facial emotion. Our findings are in line with previous neurobehavioral studies, in which patients with schizophrenia showed greater impairment in the recognition of negative emotions.