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Some of the symptoms of schizophrenia may reflect a difficulty discriminating between information that was perceived from the outside world and information that was imagined. This study used fMRI to examine the brain regions associated with this reality monitoring ability in healthy volunteers, who recollected whether information had previously been perceived or imagined, or whether information had been presented on the left or right of a monitor screen. Recent studies have suggested that schizophrenia may be associated particularly with dysfunction in medial anterior prefrontal cortex, thalamus, and cerebellum. In our data, activation in all three of these regions of interest was significantly greater during recollection of whether stimuli had been perceived or imagined versus recollection of stimulus position. In addition, reduced prefrontal activation was associated with the same misattribution error that has been observed in schizophrenia. These results indicate a possible link between the brain areas implicated in schizophrenia and the regions supporting the ability to discriminate between perceived and imagined information.