The general linear model (GLM) approach is the most commonly used method in functional magnetic resonance imaging analysis in predicting a particular response. Recently, a novel method of analysis, referred to as inter-participant correlation (IPC), was developed which attempts to determine the level of blood oxygen level-dependent (BOLD) synchrony among subjects. The IPC approach enables detection of changes in inter-participant BOLD synchrony in a manner that does not rely on an explicit model of the hemodynamic activity. In this paper, we extend IPC to the case of two groups and derive an approach for thresholding the resulting maps. We demonstrate our approach by comparing 35 patients with paranoid schizophrenia (DSM-IV sub-type 295.30) to 35 healthy matched controls during an auditory target detection paradigm. Results showed significantly lower inter-participant BOLD synchrony in patients versus healthy controls in areas including bilateral temporal lobes, medial frontal gyrus, anterior cingulate cortex, dorsolateral prefrontal cortex, thalamus, insula, and cerebellum. The IPC approach is straightforward to use and provides a useful complement to traditional GLM techniques. This approach may also be sensitive to underlying, but unpredictable, changes in inter-participant BOLD synchrony between patients and controls.