Mismatch negativity (MMN) is a component of the event-related potential elicited by deviant auditory stimuli. It is presumed to index pre-attentive monitoring of changes in the auditory environment. MMN amplitude is smaller in groups of individuals with schizophrenia compared to healthy controls. We compared duration-deviant MMN in 16 recent-onset and 19 chronic schizophrenia patients versus age- and sex-matched controls. Reduced frontal MMN was found in both patient groups, involved reduced hemispheric asymmetry, and was correlated with Global Assessment of Functioning (GAF) and negative symptom ratings. A cortically-constrained LORETA analysis, incorporating anatomical data from each individual's MRI, was performed to generate a current source density model of the MMN response over time. This model suggested MMN generation within a temporal, parietal and frontal network, which was right hemisphere dominant only in controls. An exploratory analysis revealed reduced CSD in patients in superior and middle temporal cortex, inferior and superior parietal cortex, precuneus, anterior cingulate, and superior and middle frontal cortex. A region of interest (ROI) analysis was performed. For the early phase of the MMN, patients had reduced bilateral temporal and parietal response and no lateralisation in frontal ROIs. For late MMN, patients had reduced bilateral parietal response and no lateralisation in temporal ROIs. In patients, correlations revealed a link between GAF and the MMN response in parietal cortex. In controls, the frontal response onset was 17 ms later than the temporal and parietal response. In patients, onset latency of the MMN response was delayed in secondary, but not primary, auditory cortex. However amplitude reductions were observed in both primary and secondary auditory cortex. These latency delays may indicate relatively intact information processing upstream of the primary auditory cortex, but impaired primary auditory cortex or cortico-cortical or thalamo-cortical communication with higher auditory cortices as a core deficit in schizophrenia.