During vocalization, efference copy/corollary discharge mechanisms suppress the auditory cortical response to self-generated sounds as reflected in the N1 component of the auditory event-related potential (ERP). N1 suppression during talking is reduced in patients with schizophrenia. We hypothesized that these deficits would recover with auditory training that targets the speech processing system.Forty-nine individuals early in the course of a schizophrenia-spectrum illness (ESZ) were randomly assigned to 40 h of Targeted Auditory Training (TAT; n = 23) or Computer Games (CG; n = 26). The N1 ERP component was elicited during production (Talk) and playback (Listen) of vocalization. Effects of Treatment on Global Cognition, N1 suppression (Talk-Listen), N1 during Talking and Listening were assessed. Simple effects of the passage of time were also assessed in the HC after 28 weeks.There was a Treatment × Time interaction revealing that N1 suppression was improved with TAT, but not with CG. TAT, but not CG, also improved Global Cognition. However, TAT and CG groups differed in their pre-treatment N1 suppression, and greater N1-suppression abnormalities were strongly associated with greater improvement in N1 suppression.In this sample of ESZ individuals, targeted auditory training appeared to improve the function of the efference copy/corollary discharge mechanism which tended to deteriorate with computer games. It remains to be determined if baseline N1 suppression abnormalities are necessary for TAT treatment to have a positive effect on efference copy/corollary discharge function or if improvements observed in this study represent a regression to the mean N1 suppression in ESZ.ClinicalTrials.gov NCT00694889. Registered 1 August 2007.