['Individuals with schizophrenia demonstrate impaired recognition of facial expressions and may misattribute emotional salience to otherwise nonsalient stimuli. The neural mechanisms underlying this deficit and the relationship with different symptoms remain poorly understood.', 'We used event-related functional magnetic resonance imaging to measure neural responses to neutral, mildly fearful, and prototypically fearful facial expressions. The sample included 15 medicated individuals with chronic schizophrenia (SZ) and 11 healthy control individuals (CON), matched for gender (all male), age, and years of education.', 'A repeated measures 3 x 2 analysis of variance (ANOVA) revealed a significant interaction between expression intensity and group in right parahippocampal gyrus (p < .01). Individuals with chronic schizophrenia demonstrated a decrease, whereas CON showed an increase, in right parahippocampal gyrus response to increasingly fearful expressions. Between-group comparison revealed greater activation in SZ than CON in right parahippocampal gyrus to neutral faces. The reality distortion dimension, but not neuroleptic medication dose, was positively associated with the right parahippocampal gyral and right amygdalar response to neutral faces in SZ.'] Is a reversal of the normal pattern of parahippocampal response to neutral and fearful faces associated with reality distortion in schizophrenia?