Alterations in thought and language are core symptoms of schizophrenia. Studies with structural and functional imaging (fMRI) as well as magneto/electroencephalography (EEG, MEG) on language in schizophrenia are reviewed which will help to reveal the correlates of formal thought disorder (FTD) and concretism. A model will be presented, where brain structure, function, receptorchemistry, cognitive deficits and psychopathology of language related phenomena are integrated. Positive formal thought disorder is correlated with a "functional" lesion in the superior temporal gyrus, part of Wernickes area. There is secondly a dysfunction of the semantic network, which is due to a language lateralisation deficit in the lateral temporal lobe in FTD. Further, a dysfunctional verbal self monitoring and error correction process in part responsible for FTD. Taken together, there is much evidence that the lateral temporal lobes bilaterally are predominantly involved in the generation of positive formal thought disorder in schizophrenia.