Task-induced deactivations (TIDs) of midline cortical regions are readily observed in fMRI studies and may reflect elements of a 'default-mode' of brain function associated with self-directed mental processes at rest. In this study, we examined this TID phenomenon in schizophrenia and its relevance to patients' symptoms, task performance and level of emotional awareness. Relative to control subjects, patients showed significantly greater TID of the rostral anterior cingulate (rAC)/medial prefrontal cortex (mPFC) and precuneus (PrC)/posterior cingulate cortex (PC). The magnitude of prefrontal TIDs was associated with patients' task performance and emotional awareness for others. The nature of these associations suggests a complex interchange between cognitive and emotional influences on the resting-state activity of these prefrontal 'default mode' regions in schizophrenia.