Schizophrenia is associated with perceptual and cognitive dysfunction including impairments in visual attention. These impairments may be related to deficits in early stages of sensory/perceptual processing, particularly within the magnocellular/dorsal visual pathway. In the present study, subjects viewed high and low spatial frequency (SF) gratings designed to test functioning of the parvocellular/magnocellular pathways, respectively. Schizophrenia patients and healthy controls attended to either the low SF (magnocellularly biased) or high SF (parvocellularly biased) gratings. Functional magnetic resonance imaging (fMRI) and recordings of event-related potentials (ERPs) were carried out during task performance. Patients were impaired at detecting low-frequency targets. ERP amplitudes to low-frequency gratings were diminished, both for the early sensory-evoked components and for the attend minus unattend difference component (the selection negativity), which is regarded as a neural index of feature-selective attention. Similarly, fMRI revealed that activity in extrastriate visual cortex was reduced in patients during attention to low, but not high, SF. In contrast, activity in frontal and parietal areas, previously implicated in the control of attention, did not differ between patients and controls. These findings suggest that impaired sensory processing of magnocellularly biased stimuli lead to impairments in the effective processing of attended stimuli, even when the attention control systems themselves are intact.