Auditory verbal hallucinations are thought to arise from the disordered monitoring of inner speech (thinking in words). We tested the hypothesis that a predisposition to verbal auditory hallucinations would be associated with an abnormal pattern of brain activation during tasks which involved the generation and monitoring of inner speech. The neural correlates of tasks which engaged inner speech and auditory verbal imagery were examined using positron emission tomography in (a) schizophrenic patients with a strong predisposition to auditory verbal hallucinations (hallucinators), (b) schizophrenic patients with no history of hallucinations (nonhallucinators), and (c) normal controls. There were few between-group differences in activation during the inner speech task. However, when imagining sentences spoken in another person's voice, which entails the monitoring of inner speech, hallucinators showed reduced activation in the left middle temporal gyrus and the rostral supplementary motor area, regions which were strongly activated by both normal subjects and nonhallucinators (P < 0.001). Conversely, when nonhallucinators imagined speech, they differed from both hallucinators and controls in showing reduced activation in the right parietal operculum. A predisposition to verbal hallucinations in schizophrenia is associated with a failure to activate areas implicated in the normal monitoring of inner speech, whereas the absence of a history of hallucinations may be linked to reduced activation in an area concerned with verbal prosody.