Abstract Objectives: High frequency oscillations have been suggested as a correlate of cognitive processes and have recently also been implicated in aberrant forms of information processing. The present study investigated whether magnetoencephalographic (MEG) gamma band activity (20–71 Hz) can serve as an index of cognitive processes in the absence of external stimulation and to what extent gamma activity differs between healthy people and schizophrenia patients. Methods: The amount and topography of MEG power in the gamma band range was examined in 15 schizophrenia patients and 15 healthy comparison subjects while performing a complex mental arithmetic task and at rest. Results: In healthy subjects a left frontal and left fronto-temporal increase in gamma power was observed during mental arithmetic. Schizophrenia patients either failed to display such a task effect (30–45 Hz) or had reversed lateralization with enhanced activity over right frontal and right fronto-temporal regions under cognitive demands (45–71 Hz). In the frequency band from 60 to 71 Hz patients showed less gamma at fronto-temporal, posterio-temporal and occipital sites irrespective of the task. Conclusions: These results indicate, first, that gamma topography can index cognitive activation in a very complex and purely internal task. Second, groups differed in the pattern of activation during the task, a result which may be consistent with working memory dysfunction in schizophrenia. Third, the general topographic difference between healthy subjects and patients is in line with the notion of abnormalities in the thalamocortical circuit in schizophrenia.