Patients suffering from schizophrenia may report unusual experiences of their own actions. They may either feel that external forces are controlling their actions or even their thoughts, or they may feel in control of events that in fact are not caused by their actions. Most theories link these disturbances in the sense of agency to deficits in motor prediction, resulting in a mismatch between predicted and actual sensory feedback at a central comparator mechanism. Such theories therefore can account for situations in which the sense of agency is reduced. However, other experiments as well as clinical observations show an enhanced rather than reduced sense of agency in schizophrenic patients. Here, we distinguish between a predictive and a retrospective mechanism where both contribute to the experience of agency, and show that schizophrenia is associated with a specific impairment to the predictive component. We measured subjective time estimates of self-initiated voluntary action (a key press) that were followed by a sensory effect (a tone). When the voluntary actions had a high probability of causing tones, healthy volunteers showed a predictive shift of the perceptual estimate of the action towards the tone, even on occasional trials where the tone was omitted. No such shift occurred in the absence of the tone on blocks when tones were less frequent. The predictive component of action awareness was calculated as the difference between time estimates on 'action only' trials from blocks with lower and higher tone probabilities. Schizophrenic patients lacked this predictive component of action awareness, showing a shift on 'action only' trials, regardless of the probability of the tone. Importantly, the schizophrenic deficit in predicting the relation between action and effect was strongly correlated with severity of positive psychotic symptoms, specifically delusions and hallucinations. Furthermore, the patients showed an exaggerated retrospective binding between action and tone, shifting the perceived time of action whenever the tone occurred, relative to when it did not occur. Our quantitative, implicit measures show how basic sensory and motor experience may be altered in acute psychosis. The enhanced sense of agency in schizophrenia reflects reliance on retrospection, rather than prediction, to associate actions with external events. The failure to predict the effects of one's own actions may underlie the blurring and confusion in the relationship between the self and the world that characterizes acute psychosis.