Theoretical and methodological issues in the psychophysiology of the schizophrenic process are reviewed. These include the importance of schizotypy with its compensatory abilities as well as deficits for elucidating the processes of development and prevention of schizophrenia. The importance of individual differences, syndromes and single case studies. The recognition that this is a dynamic and fluctuating illness and hence the relevance of functional neurophysiology, including the role of imbalances in hemispheric activation in ontogeny, developmental course, expression of symptoms, the effects of neuroleptics and recovery process, and the influence of stress a precipitant of breakdown. The role of thalamo-cortical activation systems. The particular value of electrocortical measures including the interrelations of electroencephalographic rhythms throughout the spectrum, and relations of gamma, dynamic core neuronal complexity, connectivity and sensory gating with experiences of unreality and disturbances of consciousness.