This article examines the effects of age, cognition, and discourse skills on the clinical manifestations of formal thought disorder in 31 children with schizophrenia, 14 with schizotypal personality disorder (SPD), and 70 who were normal. The communication deficits of the 31 children with schizophrenia have three characteristics: illogical thinking, loose associations, and impaired discourse skills. Loose associations and illogical thinking reflect different aspects of impaired attention/information processing in children with schizophrenia. Only certain aspects of the discourse deficits of the children with schizophrenia are associated with the cognitive measures used in this study. The children with SPD have similar illogical thinking and loose associations scores but a narrower range of discourse deficits than the children with schizophrenia. Implications of the interaction between the clinical, cognitive, and discourse manifestations of the communication deficits of children with schizophrenia are discussed. The possible relationship between these manifestations and positive and negative symptoms of schizophrenia are also reviewed.