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There has been evidence for functional abnormalities of the verbal working memory system in schizophrenia. Verbal working memory crucially involves the interplay between the anterior and posterior language systems, and previous studies have shown converging evidence for abnormalities in the posterior language system in schizophrenia. In this functional magnetic resonance imaging study, we measured cortical activity in chronic schizophrenic patients and matched healthy controls during auditory and visual verbal working memory tasks. We employed 1) regional analyses specifically targeting the posterior language system and 2) analyses of functional connectivity between anterior and posterior language regions. We performed these analyses separately for each memory stage and modality. In the regional analyses, the left sylvian–parietal–temporal (Spt) area consistently showed reduced activation during encoding and retrieval stages in schizophrenia. Magnitudes of activation in the left posterior superior temporal sulcus were correlated with the severity of delusions at every memory stage. Functional connectivity analyses revealed reduced connectivity between the left Spt and the anterior insula during the encoding of auditory words. In addition, the connectivity strength was correlated with the severity of auditory hallucinations. These findings identify abnormal components in the verbal working memory system and illustrate their possible overlap with the mechanisms of core schizophrenic symptoms.