Schizophrenia (SZ) is a devastating neuropsychiatric disorder affecting 1% of the general population, and is characterized by symptoms such as delusions, hallucinations, and blunted affect. While many ideas regarding SZ pathogenesis have been put forth, the majority of research has focused on neurotransmitter function, particularly in relation to altered dopamine activity. However, treatments based on this paradigm have met with only modest success, and current medications fail to alleviate symptoms in 30-60% of patients. An alternative idea postulated a quarter of a century ago by Feldberg (Psychol. Med. 6 (1976) 359) and Horrobin (Lancet 1 (1977) 936) involves the theory that SZ is associated in part with phospholipid/fatty acid abnormalities. Since then, it has been repeatedly shown that in both central and peripheral tissue, SZ patients demonstrate increased phospholipid breakdown and decreased levels of various polyunsaturated fatty acids (PUFAs), particularly arachidonic acid (AA). Given the diverse physiological function of membrane phospholipids and PUFAs, an elucidation of their role in SZ pathophysiology may provide novel strategies in the treatment of this disorder. The purpose of this review is to summarize the relevant data on membrane phospholipid/PUFA defects in SZ, the physiological consequence of altered AA signaling, and how they relate to the neurobiological manifestations of SZ and therapeutic outcome.