In two previous studies, it was observed that schizophrenic patients display increased confidence in memory errors compared with controls. The patient group displayed an increased proportion of errors in their knowledge system, quantified as the percentage of high-confident responses that are errors. The latter phenomenon has been termed knowledge corruption and is put forward as a risk factor for the emergence of delusions. In the present study, knowledge corruption was analyzed separately for different aspects of memory errors. A source-monitoring task was used, for which participants (30 schizophrenic patients with past or current paranoid ideas and 15 healthy controls) were asked to provide associates for each of 20 prime words. Later, participants were required to recognize studied words among distractor words, judge the original source, and provide a confidence rating for the most recent decision. Schizophrenic patients displayed greater confidence in memory errors compared with controls. Knowledge corruption was observed to be significantly greater in schizophrenic patients relative to controls for false-positive and false-negative judgments. It is proposed that reliance on false knowledge represents a candidate mechanism for the emergence of fixed false beliefs (i.e., delusions).