Abstract Background Auditory verbal hallucinations (AVH) in schizophrenia may arise because of aberrant speech perception. We used an electroencephalography method to examine the neural processes underlying speech perception in schizophrenic patients with hallucinations. Methods Cortical event-related potentials (ERPs) were analyzed topographically (scalp potential and scalp current density (SCD) mapping) in response to the vowel /a/ using a passive paradigm in 26 patients with schizophrenia. Results From the SCD distribution of the P1 peak, we showed that, whereas the hallucination score (PSYRATS) was negatively correlated with the amplitude of the frontal currents, the PANSS negative symptom score was negatively correlated with the amplitude of the temporal currents in patients with schizophrenia. Conclusions These results provide evidence that AVH and negative symptoms are associated with abnormal early processing of speech. Whereas AVH are related to decreased early frontal activation, negative symptoms are associated with a reduced early temporal response.