Cognitive impairment is recognized as an important contributing factor in the disability associated with schizophrenia. This book outlines an investigation of ERP indices of working memory in schizophrenia, with PTSD as a comparison group. A range of ERP abnormalities were found including reduced N1, P3 and late slow wave components. These indicated abnormalities in attended processing of the physical characteristics of the stimulus as well as in working memory updating, later consolidation and rehearsal processes, and executive processing of targets. Parital improvement was found when patients were treated with clozapine. PTSD was associated with a different pattern of abnormalities indicating difficulties assessing the significance of incoming stimuli. These findings suggest that patients with schizophrenia have an impaired ability to apprehend and create an accurate internal representation of new information, along with an impaired capacity to identify and act on relevant information.