Integrity of early visual sensory processing in schizophrenia was assessed using the well characterized P1 and N1 components of the visual evoked potential (VEP) as our dependent measures. VEPs were recorded in response to successively less fragmented line drawings of common objects. P1 amplitudes were significantly reduced across all stimulus conditions for patients versus controls. Further, this decrement was relatively greater at parieto-occipital than occipito-temporal electrode sites. No differences in N1 amplitude were found. The finding of P1 deficits in patients, particularly over dorsal scalp, supports the view that schizophrenia is associated with impairment of early dorsal visual stream processing. On the other hand, the finding of normal N1 amplitudes in patients suggests that early stages of ventral stream processing may be relatively more intact. These results imply that the cognitive impairment seen in schizophrenia is not just due to deficits in higher order aspects of cognition but also encompasses significant deficits in early sensory processing.