Aydin and colleagues reported a reversal of physiological 'right-ear advantage' in a group of right-handed patients with schizophrenia, using an auditory acuity test. In schizophrenia, auditory hallucinations may appear to be spatially located inside or outside the patient's head. Here we show, using virtual acoustic space techniques, that normal right-handed subjects have a right-ear advantage for correctly locating the 'source' of hallucination-like voices as from either inside or outside the head. We propose a model for understanding lateralised, external hallucinations in schizophrenia based upon reversal of normal cortical asymmetry for auditory spatial processing.