People with schizophrenia consistently show memory impairment on varying tasks including item recognition memory. Relative to the correct rejection of distracter items, the correct recognition of studied items consistently produces an effect termed the old/new effect that is characterized by increased activity in parietal and frontal cortical regions. This effect has received only scant attention in schizophrenia. We examined the old/new effect in 15 people with schizophrenia and 18 controls during an item recognition test, and neural activity was examined with event-related functional magnetic resonance imaging. Both groups performed equally well during the recognition test and showed increased activity in a left dorsolateral prefrontal region and in the precuneus bilaterally during the successful recognition of old items relative to the correct rejection of new items. The control group also exhibited increased activity in the dorsal left parietal cortex. This region has been implicated in the top-down modulation of memory which involves control processes that support memory-retrieval search, monitoring and verification. Although these processes may not be of paramount importance in item recognition memory performance, the present findings suggest that people with schizophrenia may have difficulty with such top-down modulation, a finding consistent with many other studies in information processing.