Failure of corollary discharge, a mechanism for distinguishing self-generated from externally generated percepts, has been posited to underlie certain positive symptoms of schizophrenia, including auditory hallucinations. Although originally described in the visual system, corollary discharge may exist in the auditory system, whereby signals from motor speech commands prepare auditory cortex for self-generated speech. While associated with sensorimotor systems, it might also apply to inner speech or thought, regarded as our most complex motor act. In this paper, we describe the results of a series of studies in which we have shown that: (1) event-related brain potentials (ERPs) can be used to demonstrate the corollary discharge phenomenon during talking, (2) corollary discharge is abnormal in patients with schizophrenia, (3) EEG gamma band coherence between frontal and temporal lobes is greater during talking than listening and is disrupted by distorted feedback during talking in normals, and (4) patients with schizophrenia do not show this pattern for EEG gamma coherence. While these studies have identified ERPs and EEG gamma coherence indices of the efference copy/corollary discharge system and documented abnormalities in these systems in patients with schizophrenia, we have so far had limited success in establishing a relationship between these neurobiologic indicators of corollary discharge abnormality and reports of hallucinations in patients.