The cognitive and functional deterioration observed in many 'poor-outcome' patients with schizophrenia suggests an ongoing neurodegenerative process. Diagnostic neuropathologic studies have excluded known neurodegenerative diseases as the cause of this dementia, and in a previous quantitative investigation of neurodegeneration and neural injury in this population we found no abnormalities in the cerebral cortex. However, it is possible that the deterioration observed in these patients could be due to subcortical neurodegenerative processes. Neurodegeneration and neural injury in the caudate nucleus and mediodorsal nucleus of the thalamus were investigated in a postmortem study of 11 prospectively accrued, clinically well-characterized elderly people with schizophrenia, 11 elderly control subjects with no neuropsychiatric illness, and 12 subjects with Alzheimer's disease. Traditional and immunohistochemical staining and unbiased computerized counting methods were used to quantify common markers of neurodegeneration and neural injury (neuron loss, neurofibrillary tangles, astrocytosis, microgliosis). No statistically significant differences were found between schizophrenia and control subjects for the densities of any markers. There is no evidence that abnormal neurodegeneration occurs in these two important subcortical structures.