Working memory (WM) impairment, a core feature of schizophrenia, is often associated with aberrant dorsolateral prefrontal cortex (dlPFC) activation. Reduced resting-state connectivity within the frontoparietal control network (FPCN) has also been reported in schizophrenia. However, interpretation of WM-related dlPFC dysfunction has been limited by performance differences between patients and controls, and by uncertainty over the relevance of resting-state connectivity to network engagement during task. We contrasted brain activation in 40 schizophrenia patients and 40 controls during verbal WM performance, and evaluated underlying functional connectivity during rest and task. During correct trials, patients demonstrated normal FPCN activation, despite an inverse relationship between positive symptoms and activation. FPCN activation differed between the groups only during error trials (controls>patients). In contrast, controls demonstrated stronger deactivation of the ventromedial prefrontal cortex (vmPFC) during correct and error trials. Functional connectivity analysis indicated impaired resting-state FPCN connectivity in patients, but normal connectivity during task. However, patients showed abnormal connectivity among regions such as vmPFC, lateral orbitofrontal cortex, and parahippocampal gyrus (PHG) during both rest and task. During task, patients also exhibited altered thalamic connectivity to PHG and FPCN. Activation and connectivity patterns that were more characteristic of controls generally correlated with better performance. In summary, patients demonstrated normal FPCN activation when they remained on-task, and exhibited normal FPCN connectivity during WM, whereas vmPFC deactivation differences persisted regardless of WM performance. Our findings suggest that altered FPCN activation in patients reflects performance difference, and that limbic and thalamic dysfunction is critically involved in WM deficits in schizophrenia.