Context: Visual masking procedures assess the earliest stages of visual processing. Patients with schizophrenia reliably show deficits on visual masking, and these procedures have been used to explore vulnerability to schizophrenia, probe underlying neural circuits, and help explain functional outcome. Objective: To identify and compare regional brain activity associated with one form of visual masking (ie, backward masking) in schizophrenic patients and healthy controls. Design: Subjects received functional magnetic resonance imaging scans. While in the scanner, subjects performed a backward masking task and were given 3 functional localizer activation scans to identify early visual processing regions of interest (ROIs). Setting: University of California, Los Angeles, and the Department of Veterans Affairs Greater Los Angeles Healthcare System. Participants: Nineteen patients with schizophrenia and 19 healthy control subjects. Main Outcome Measure: The magnitude of the functional magnetic resonance imaging signal during backward masking. Results: Two ROIs (lateral occipital complex [LO] and the human motion selective cortex [hMT]) showed sensitivity to the effects of masking, meaning that signal in these areas increased as the target became more visible. Patients had lower activation than controls in LO across all levels of visibility but did not differ in other visual processing ROIs. Using whole-brain analyses, we also identified areas outside the ROIs that were sensitive to masking effects (including bilateral inferior parietal lobe and thalamus), but groups did not differ in signal magnitude in these areas. Conclusions: The study results support a key role in LO for visual masking, consistent with previous studies in healthy controls. The current results indicate that patients fail to activate LO to the same extent as controls during visual processing regardless of stimulus visibility, suggesting a neural basis for the visual masking deficit, and possibly other visual integration deficits, in schizophrenia. ©2009 American Medical Association. All rights reserved.