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OBJECTIVE: Individuals are able to recognize common objects even when portions of them are obscured from view, reflecting the operation of neural perceptual closure processes. This study evaluates the integrity of object recognition and perceptual closure as a function of sensory and cognitive manipulations. METHOD: Object recognition was examined in 26 subjects with schizophrenia and 23 nonpsychiatric comparison subjects of similar age with a presentation of fragmented pictures by means of the ascending method of limits. The effects of prior exposure to subsets of stimuli and of word prompting were examined in separate testing phases. Demographic and clinical characteristics were evaluated as covariates. RESULTS: Although they had impairments in perceptual closure, schizophrenic patients showed improvement in performance equivalent to that of nonpatient comparison subjects with prior exposure to the pictures (i.e., repetition priming) and with presentation of valid word prompts. A significant correlation was found between impaired performance and the severity of negative symptoms. CONCLUSIONS: The results support models of widespread dysfunction in information processing in patients with schizophrenia involving both sensory and cognitive regions. Perceptual closure is significantly impaired in schizophrenic patients; however, this deficit in sensory precision is dissociated from the effects of higher-order repetition priming and word prompting. Furthermore, this work suggests that deficits in perceptual closure may contribute to the muted world experience of patients with the persistent negative symptoms of schizophrenia.