The ability to read faces is a basic component of social cognition, and has gained considerable interest over the past decades in schizophrenia research. It has been shown to be closely related to psychosocial functioning and quality of life in schizophrenia. Use of event-related potential (ERP) paradigms to measure neural activity during emotion processing has become a major approach in affective neuroscience, since this method captures the exact time course of the emotional information-processing cascade from early to later processing stages with a millisecond-resolution. Emotional stimuli have been shown to elicit an increased processing of perceptual information, and increased attentional allocation. ERP studies of emotion recognition paradigms with schizophrenia patients have rapidly accumulated in the past years. However, results are still divergent and often controversial as to where and when abnormal activation patterns occur in the course of emotion processing as compared to healthy controls. The variability of findings has given room for interpreting results as supporting both a bottom-up, initial sensory-encoding-deficit-view, and also a later, top-down contextual-attentional-deficit view. This presentation will give an overview on findings of emotion recognition deficits as measured by the ERP technique in schizophrenia patients. Finally, we present our own results of fearful face processing and relate electrophysiological results to the clinical symptomatology of fear in schizophrenia. Thus, we attempt to broaden the context of interpreting electrophysiological abnormalities seen in face processing in schizophrenia via linking electrophysiological and clinical findings.