Memory of contextual information is essential to one's quality of living. This study investigated if the different components of prose memory, across three recall conditions: first learning trial immediate recall, fifth learning trial immediate recall, and 30-min delayed recall, are differentially impaired in people with schizophrenia, relative to healthy controls. A total of 39 patients with schizophrenia and 39 matched healthy controls were recruited. Their prose memory, in terms of recall accuracy, temporal sequence, recognition accuracy and false positives, commission of distortions, and rates of learning, forgetting, and retention were tested and compared. After controlling for the level of intelligence and depression, the patients with schizophrenia were found to commit more distortions. Furthermore, they performed poorer on recall accuracy and temporal sequence accuracy only during the first initial immediate recall. On the other hand, the rates of forgetting/retention and recognition accuracy were comparable between the two groups. These findings suggest that people with schizophrenia could be benefited by repeated exposure to the materials to be remembered. These results may have important implications for rehabilitation of verbal declarative memory deficits in schizophrenia.