Attention deficits have been consistently described in schizophrenia. Functional neuroimaging and electrophysiological studies have focused on anterior cingulate cortex (ACC) dysfunction as a possible mediator. However, recent basic research has suggested that the effect of attention is also observed as a relative amplification of activity in modality-associated cortical areas. In the present study, the question was addressed whether an amplification deficit is seen in the auditory cortex of schizophrenic patients during an attention-requiring choice reaction task. Twenty-one drug-free schizophrenic patients and 21 age- and sex-matched healthy controls were studied (32-channel EEG). The underlying generators of the event-related N1 component were separated in neuroanatomic space using a minimum-norm (LORETA) and a multiple dipole (BESA) approach. Both methods revealed activation in the primary auditory cortex (peak latency approximately 100 ms) and in the area of the ACC (peak latency approximately 130 ms). In addition, the adapted multiple dipole model also showed a temporal-radial source activation in nonprimary auditory areas (peak latency approximately 140 ms). In schizophrenic patients, significant activation deficits were found in the ACC as well as in the left nonprimary auditory areas that differentially correlated with negative and positive symptoms. The results suggest that (1) the source in the nonprimary auditory cortex is detected only with a multiple dipole approach and (2) that the N1 generators in the ACC and in the nonprimary auditory cortex are dysfunctional in schizophrenia. This would be in line with the notion that attention deficits in schizophrenia involve an extended cortical network.