Recent evidence suggests that changes in brain structure associated with alcohol abuse are compounded in individuals dually diagnosed with alcohol abuse and schizophrenia. To investigate the separate, and possibly interacting, effects of these diagnoses, an event-related brain potential (ERP) measure of auditory information processing (P50 sensory gating paradigm) and neuropsychological measures were administered to healthy control participants with either (1a) no history of alcohol abuse/dependence, or (1b) a remote history of alcohol abuse/dependence, and patients with schizophrenia with either (2a) no history of alcohol abuse/dependence, or (2b) a remote history of alcohol abuse/dependence. Schizophrenia was associated with impaired P50 sensory gating and poorer performance across neuropsychological scores compared to measurements in healthy control participants. Those with a positive alcohol history had impaired gating ratios in contrast to those with a negative alcohol history. There were additive effects of schizophrenia diagnosis and alcohol history for P50 sensory gating and for neuropsychological scores: attention, working memory, and behavioral inhibition. For executive attention and general memory there was an interaction, suggesting that the combination of schizophrenia and history of alcohol abuse results in greater impairment than that predicted by the presence of either diagnosis alone. (JINS, 2006, 12, 34–44.)