Alterations in sensorimotor processing and predictive mechanisms have both been proposed as the primary cause of eye tracking deficits in schizophrenia. 20 schizophrenia patients and 20 healthy controls were assessed on blocks of predictably moving visual targets at constant speeds of 10, 15 or 30°/s. To assess internal drive to the eye movement system based on predictions about the ongoing target movement, targets were blanked off for either 666 or 1,000 ms during the ongoing pursuit movement in additional conditions. Main parameters of interest were eye deceleration after extinction of the visual target and residual eye velocity during blanking intervals. Eye deceleration after target extinction, reflecting persistence of predictive signals, was slower in patients than in controls, implying greater rather than diminished utilization of predictive mechanisms for pursuit in schizophrenia. Further, residual gain was not impaired in patients indicating a basic integrity of internal predictive models. Pursuit velocity gain in patients was reduced in all conditions with visible targets replicating previous findings about a sensorimotor transformation deficit in schizophrenia. A pattern of slower eye deceleration and unimpaired residual gain during blanking intervals implies greater adherence to top-down predictive models for pursuit tracking in schizophrenia. This suggests that predictive modeling is relatively intact in schizophrenia and that the primary cause of abnormal visual pursuit is impaired sensorimotor transformation of the retinal error signal needed for the maintenance of accurate visually driven pursuit. This implies that disruption in extrastriate and sensorimotor systems rather than frontostriatal predictive mechanisms may underlie this widely reported endophenotypes for schizophrenia.