People with schizophrenia consistently report normal levels of pleasant emotion when exposed to evocative stimuli, suggesting intact consummatory pleasure. However, little is known about the neural correlates and time course of emotion in schizophrenia. This study used a well-validated affective picture viewing task that elicits a characteristic pattern of event-related potentials (ERPs) from early to later processing stages (i.e., P1, P2, P3, and late positive potentials [LPPs]). Thirty-eight stabilized outpatients with schizophrenia and 36 healthy controls viewed standardized pleasant, unpleasant, and neutral pictures while ERPs were recorded and subsequently rated their emotional responses to the stimuli. Patients and controls responded to the pictures similarly in terms of their valence ratings, as well as the initial ERP components (P1, P2, and P3). However, at the later LPP component (500-1,000 ms), patients displayed diminished electrophysiological discrimination between pleasant versus neutral stimuli. This pattern suggests that patients demonstrated normal self-reported emotional experience and intact initial sensory processing of and resource allocation to emotional stimuli. However, they showed a disruption in a later component associated with sustained attentional processing of emotional stimuli.