ERPs were recorded during a word recognition task to investigate cognitive dysfunction in schizophrenia. Thirteen medicated schizophrenics and 26 normal controls were tested. In each trial a pair of stimuli, S1 (a word) and S2 (a word or a non-word), were presented. The subjects were required to discriminate between a word and a non-word for S2 (lexical decision task). In a related (R) condition, S2 was the antonym of S1 (e.g., brother-sister); in an unrelated (U) condition, S1 and S2 were semantically unrelated (e.g., brother-drive); in the non-word (N) condition, S2 was a non-word (e.g., brother-grofe). The ERPs for S2 were analyzed, and the contextual effects on the ERPs for S2 observed for both the patients and controls. For both groups, in the U and N conditions S2 elicited a large negative-trending deflection (N370). In contrast, in the R condition it elicited only a small negative-trending notch. There was no difference in the amplitude of N370 between the groups, but its latency was more prolonged or its wave shape more extended for the schizophrenics than for the controls. The N400 amplitude is concluded to remain unchanged in schizophrenics.