Hallucinations, perceptions in the absence of external stimuli, are prominent among the core symptoms of schizophrenia. The neural correlates of these brief, involuntary experiences are not well understood, and have not been imaged selectively. We have used new positron emission tomography (PET) methods to study the brain state associated with the occurrence of hallucinations in six schizophrenic patients. Here we present a group study of five patients with classic auditory verbal hallucinations despite medication, demonstrating activations in subcortical nuclei (thalamic, striatal), limbic structures (especially hippocampus), and paralimbic regions (parahippocampal and cingulate gyri, as well as orbitofrontal cortex). We also present a case study of a unique, drug-naive patient with visual as well as auditory verbal hallucinations, demonstrating activations in visual and auditory/linguistic association cortices as part of a distributed cortical-subcortical network. Activity in deep brain structures, identified with group analysis, may generate or modulate hallucinations, and the particular neocortical regions entrained in individual patients may affect their specific perceptual content. The interaction of these distributed neural systems provides a biological basis for the bizarre reports of schizophrenic patients.