Episodic memory deficits are consistently documented as a core aspect of cognitive dysfunction in schizophrenia patients, present from the onset of the illness and strongly associated with functional disability. Over the past decade, research using approaches from experimental cognitive neuroscience revealed disproportionate episodic memory impairments in schizophrenia (Sz) under high cognitive demand relational encoding conditions and relatively unimpaired performance under item-specific encoding conditions. These specific deficits in component processes of episodic memory reflect impaired activation and connectivity within specific elements of frontal-medial temporal lobe circuits, with a central role for the dorsolateral prefrontal cortex (DLPFC), relatively intact function of ventrolateral prefrontal cortex and variable results in the hippocampus. We propose that memory deficits can be understood within the broader context of cognitive deficits in Sz, where impaired DLPFC-related cognitive control has a broad impact across multiple cognitive domains. The therapeutic implications of these findings are discussed.