The history of psychiatric research is filled with widely accepted etiologic and pathophysiologic theories that eventually were proven wrong. The prevailing pathophysiologic theories of schizophrenia have emphasized the role of abnormal neurodevelopment in determining the onset and course of the illness. Relatively little attention has been paid to the role of neurodegenerative processes despite the clinical course of the illness and the fact that most patients experience varying degrees of behavioral and cognitive deterioration. This is partially due to the absence of clear histologic evidence of neurodegeneration, but may also be due to the narrow traditional conception of neurodegeneration that is generally employed. This article suggests that the rejection of a role for neurodegeneration in the pathophysiology of schizophrenia is unproven and may be premature. A wholly neurodevelopmental perspective of the illness imbues the illness with a pessimistic inevitability and therapeutic nihilism that may be unwarranted. This article reviews selectively a diverse body of evidence that is consistent with the hypothesis that schizophrenia involves a limited neurodegenerative process reflected by the psychotic symptoms and that is most active in the early stages of the illness. The evidence for this hypothesis comes from studies of premorbid status, illness course, symptomatology and treatment effects as well as neuroimaging and postmortem findings. Recent results from the latter interpreted in the context of molecular neurobiology suggest new pathophysiologic models.