An approach which views schizophrenia as a disturbance of information processing appears promising as a way of linking biological and clinical aspects of the disorder. A review of research in this area led to the suggestion that the basic disturbance in schizophrenia is "a weakening of the influences of stored memories of regularities of previous input on current perception". This formulation leads to the prediction that in certain circumstances, schizophrenics may perform better than normal subjects. Recent studies employing tasks derived from human experimental psychology provide evidence in support of the model. It is argued that the link between information processing disturbances and biological abnormalities may be facilitated by the use of paradigms derived from animal learning theory (latent inhibition and Kamin's blocking effect). On both tasks the pattern of performance of acute schizophrenics is consistent with the cognitive model. The ways in which such an information processing disturbance may lead to schizophrenic symptomatology are outlined, with particular reference to the formation and maintenance of delusional beliefs. The core cognitive abnormality may result from a disturbance in any of the brain structures involved in the prediction of subsequent sensory input. The proposed circuit, which draws heavily on Gray's model, implicates in particular the hippocampus and related areas and is consistent with studies of brain pathology in schizophrenia.