Objective: There is evidence of linkage between chromosome 15q14 and the P50 auditory evoked response, a heritable neuropsychological marker associated with increased risk of schizophrenia. Chromosome 15q14 harbors the alpha-7 nicotinic receptor subunit gene (CHRNA7) and a hybrid gene of unknown function (CHRFAM7A). CHRNA7 is involved in memory formation, a core dysfunction in schizophrenia. The authors set out to determine if this locus is associated with memory dysfunction in schizophrenia. Method: A 2bp deletion in exon 6 of CHRFAM7A, which disrupts the hybrid gene and has previously been associated with P50 deficit, was genotyped in 251 individuals from the Maudsley Family Study of schizophrenia. Episodic memory function was assessed using the Wechsler Memory Scale. Results: Significant associations were identified with delayed recall and percentage retained, with the presence of the deletion predicting worse performance. Conclusions: These observations indicate that episodic memory function is a schizophrenia endophenotype and implicate the CHRFAM7A/CHRNA7 locus in modulating its function.