The use of linguistic context in positively thought-disordered (TD) schizophrenics was investigated through examination of their performance on an on-line word-monitoring task. Controls and non-TD schizophrenics took longer to recognize words preceded by linguistic anomalies compared with words in normal sentences. Compared with both other groups, TD schizophrenics showed significantly smaller differences in reaction time, suggesting that they were relatively insensitive to linguistic violations. TD schizophrenics were also less sensitive to linguistic violations in an off-line version of the task, in which they judged whether the sentences "made sense." Finally, these participants produced more errors on a verbal fluency task than did non-TD schizophrenics or normal controls. These findings are consistent with the theory that schizophrenic thought disorder arises from a deficit in the use of linguistic context to process and produce speech.