Event-related potentials (ERPs) were recorded from adult schizophrenics and age- and education-matched normal controls during performance of an idiom recognition task involving judgments of the meaningfulness of idiomatic, literal, and nonsense phrases. Schizophrenics produced more errors and had prolonged reaction times while attempting to correctly differentiate meaningful from meaningless phrases. An ERP correlate of that deficit was a larger than normal N400 to idioms and literals, with no difference in N400 amplitude to nonsense phrases. This result was interpreted as evidence that the influence of the linguistic context provided by the first word of two-word idiomatic and literal phrases is reduced in schizophrenia. Schizophrenics also showed reduced amplitude P300.