Previous investigations have found impaired recognition of facial affect and cognition in schizophrenia. We compared patients with schizophrenia and healthy control volunteers on computerized tasks of emotion recognition, to determine whether emotion processing deficits were correlated with neurocognitive performance. A Computerized Neuropsychological Test Battery (CNP) was administered to 40 patients (25 male, 15 female, mean age+/-S.D. 30.4+/-8.1) with schizophrenia (DSM-IV, 15 first episode and 25 chronically ill patients) treated with atypical neuroleptics and 43 healthy volunteers. A German version of the PENN Facial Discrimination, Differentiation and Memory Test, including happy, sad and neutral faces was used. Additionally, all patients were tested with a standard neuropsychological battery and rated for positive and negative symptoms. Patients with schizophrenia performed worse than control subjects on all emotion recognition tasks (p<0.01). We found higher error rates for discrimination of emotion in happy (p<0.02) and happy female faces (p<0.01), for differentiation of sad versus happy faces (p<0.001) and for facial memory (p<0.04). Poorer performance in emotion discrimination and facial memory correlated with severity of negative symptoms, abstraction-flexibility (p<0.001), verbal memory (p<0.01) and language processing (p<0.001). The study did not reveal a specific deficit for emotion recognition in schizophrenia. These findings lend support to the notion that difficulties in emotion recognition are associated in schizophrenia with key cognitive deficits.