BACKGROUND: Abnormalities of face affect naming and face recognition occur in schizophrenia but it is not clear whether the deficits reflect wider underlying impairments of perception, memory, language or executive function. METHOD: Twenty-six patients with schizophrenia were compared with 23 healthy volunteers on neuropsychological tests and tests of face and affect processing. Face and non-face tests were compared at four levels of processing: visuo-spatial perception, recognition memory, language and naming, and executive function. We examined relationships with drug dose, duration of illness and pre-morbid and current IQ. RESULTS: Patients and controls did not differ in estimated pre-morbid IQ but current IQ was 12 points lower in patients. At each level of processing there were correlated deficits of face and non-face processing in the patients that were mostly independent of IQ decline. Impaired face and non-face visuo-spatial function and recognition performance were generally correlated with drug dose. Impairments in naming face emotions were correlated with other non-face naming tasks independently of drug dose. Patients performed less well than controls in classifying faces by emotion while ignoring identity and this was associated with poorer performance in Wisconsin Card Sorting. CONCLUSIONS: The pattern of results suggests that deficits in face processing reflect three wider neuropsychological impairments: a drug-related impairment of visual imagery, and disease-related impairments of semantic retrieval and executive function.