Transcranial magnetic stimulation, EEG, and behavioral studies by our group implicate spurious activation of speech perception neurocircuitry in the genesis of auditory hallucinations in schizophrenia. The neurobiological basis of these abnormalities remains uncertain, however. We review our ongoing studies, which suggest that altered cortical coupling underlies speech processing in schizophrenia and is expressed via disrupted gamma resonances and impaired corollary discharge function of self-generated verbal thought.