Perceptual organization (PO) refers to the processes by which visual information is structured into coherent patterns such as groups, contours, perceptual wholes, and object representations. Impairments in PO have been demonstrated in schizophrenia since the 1960s and have been linked to several illness-related factors including poor premorbid functioning, poor prognosis, and disorganized symptoms. This literature was last reviewed in 2005. Since then, electrophysiological (electroencephalographic, event-related potential, and magnetoencephalographic) and fMRI studies in both patient and nonpatient samples have clarified brain mechanisms involved in the impairment, and additional behavioral studies in patients and nonpatients have clarified the computational mechanisms. In addition, data now exist on the functional consequences of PO impairments, in terms of secondary difficulties in face processing, selective attention, working memory, and social cognition. Preliminary data on drug effects on PO and on changes in response to treatment suggest that anomalies in PO may furnish a biomarker for the integrity of its associated biological mechanisms. All of this recent evidence allows for a clearer picture of the nature of the impairment and how it relates to broader aspects of brain and behavioral functioning in schizophrenia.