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Objective: High-density EEG during sleep represents a powerful new tool to reveal potential abnormalities in rhythm-generating mechanisms while avoiding confounding factors associated with waking activities. As a first step in this direction, the authors employed high-density EEG to explore whether sleep rhythms differ between schizophrenia subjects, healthy individuals, and a psychiatric control group with a history of depression. Method: Healthy comparison subjects (N=17), medicated schizophrenia patients (N=18), and subjects with a history of depression (N=15) were recruited. Subjects were recorded during the first sleep episode of the night with a 256-electrode high-density EEG. Recordings were analyzed for changes in EEG power spectra, power topography, and sleep-specific cortical oscillations. Results: The authors found that the schizophrenia group had a significant reduction in centroparietal EEG power, from 13.75 to 15.00 Hz, in relation to both the comparison and depression groups. No significant difference in EEG power between the comparison and depression groups was identified. The authors also found a decrease in sleep spindle number, amplitude, duration, and integrated spindle activity in schizophrenia patients. Furthermore, integrated spindle activity had an effect size corresponding to 93.0% or 90.2% separation of the schizophrenia from the comparison or depression group. Conclusions: Sleep spindles are generated by the thalamic reticular nucleus in conjunction with specific thalamic nuclei and are modulated by corticothalamic and thalamocortical connections. The deficit in sleep spindles in schizophrenia subjects may reflect dysfunction in thalamic-reticular and thalamocortical mechanisms and could represent a biological marker of illness.