Schizophrenia has been associated with deficits in facial affect processing, especially negative emotions. However, the exact nature of the deficit remains unclear. The aim of the present study was to investigate whether schizophrenia patients have problems in automatic allocation of attention as well as in controlled evaluation of facial affect. Thirty-seven patients with schizophrenia were compared with 41 control subjects on incidental facial affect processing (gender decision of faces with a fearful, angry, happy, disgusted, and neutral expression) and degraded facial affect labeling (labeling of fearful, angry, happy, and neutral faces). The groups were matched on estimates of verbal and performance intelligence (National Adult Reading Test; Raven's Matrices), general face recognition ability (Benton Face Recognition), and other demographic variables. The results showed that patients with schizophrenia as well as control subjects demonstrate the normal threat-related interference during incidental facial affect processing. Conversely, on controlled evaluation patients were specifically worse in the labeling of fearful faces. In particular, patients with high levels of negative symptoms may be characterized by deficits in labeling fear. We suggest that patients with schizophrenia show no evidence of deficits in the automatic allocation of attention resources to fearful (threat-indicating) faces, but have a deficit in the controlled processing of facial emotions that may be specific for fearful faces.