Theories of schizophrenia propose that abnormal functioning of the neural reward system is linked to negative and psychotic symptoms, by disruption of reward processing and promotion of context-independent false associations. Recently, it has been argued that an insula-anterior cingulate cortex (ACC) salience network system enables switching of brain states from the default mode to a task-related activity mode. Abnormal interaction between the insula-ACC system and reward processing regions may help explain abnormal reinforcer processing and symptoms. Here we use functional magnetic resonance imaging to assess the neural correlates of reward processing in schizophrenia. Furthermore, we investigated functional connectivity between the dopaminergic midbrain, a key region for the processing of reinforcers, and other brain regions. In response to rewards, controls activated task related regions (striatum, amygdala/hippocampus and midbrain) and the insula-ACC salience network. Patients similarly activated the insula-ACC salience network system but failed to activate task related regions. Reduced functional connectivity between the midbrain and the insula was found in schizophrenia, with the extent of this abnormality correlating with increased psychotic symptoms. The findings support the notion that reward processing is abnormal in schizophrenia and highlight the potential role of abnormal interactions between the insula-ACC salience network and reward regions. (C) 2012 Elsevier Ireland Ltd. All rights reserved.