Negative symptom schizophrenia and negative schizotypy are associated with deficits in episodic memory, which may reflect deficits in context processing. However, studies that rely on summary performance measures such as mean accuracy or latency are limited in the extent that they can examine processes underlying memory impairment. The present study decomposed free recall performance by examining serial position functions, first response probability, temporal contiguity effect, cumulative recall functions, and interresponse times in high-positive schizotypy, high-negative schizotypy, and control groups. The negative schizotypy group exhibited not only impaired overall free recall performance but also a pattern of deficits consistent with impaired context processing on the underlying measures. Specifically, the negative schizotypy group was less likely than the other groups to initiate recall with the first item in the list, suggesting impaired encoding or reinstatement of context, and also showed reduced temporal contiguity compared with the other groups, suggesting diminished temporal organization. The cumulative recall function indicated that the negative schizotypy group experienced disruptions in both the sampling and recovery stages of retrieval. Finally, the negative schizotypy group experienced greater slowing between the responses during retrieval, consistent with the finding of reduced temporal contiguity and indicating that it likely terminated memory search before the remaining groups. The positive schizotypy and control groups did not differ on any of the measures. The finding that context-processing deficits occur in both subclinical negative schizotypy and negative symptom schizophrenia suggests that they may represent core areas of impairment in the schizophrenia spectrum.