Schizophrenia is associated with abnormalities in emotional processing and social cognition. However, it remains unclear whether patients show abnormal neurophysiological responses during fast, online appraisals of the emotional meaning of social information. To examine this question, event-related potentials (ERPs) were collected while 18 schizophrenia patients and 18 demographically matched controls evaluated 2-sentence vignettes describing negative, positive, or neutral social situations. ERPs were time locked to a critical word (CW) in the second sentence that conferred emotional valence. A late positivity effect to emotional (vs neutral) CWs was seen in both groups (in controls, to negative and positive CWs; in patients, to negative CWs only). However, the controls showed a greater late positivity effect to the negative and positive (vs neutral) CWs than the schizophrenia patients at mid-posterior (negative vs neutral) and at right posterior peripheral (positive vs neutral) sites. These between-group differences arose from reduced amplitudes of the late positivity to the negative and positive CWs in the patients relative to the controls; there was no difference between the 2 groups in the amplitude of the late positivity to the neutral CWs. These findings suggest that schizophrenia is associated with a specific neural deficit during the online evaluation of emotionally valent, socially relevant information.