Schizophrenia patients suffer from severe cognitive deficits, such as impaired reality monitoring. Reality monitoring is the ability to distinguish the source of internal experiences from outside reality. During reality monitoring tasks, schizophrenia patients make errors identifying " I made it up" items, and even during accurate performance, they show abnormally low activation of the medial prefrontal cortex (mPFC), a region that supports self-referential cognition. We administered 80 hr of computerized training of cognitive processes to schizophrenia patients and found improvement in reality monitoring that correlated with increased mPFC activity. In contrast, patients in a computer games control condition did not show any behavioral or neural improvements. Notably, recovery in mPFC activity after training was associated with improved social functioning 6 months later. These findings demonstrate that a serious behavioral deficit in schizophrenia, and its underlying neural dysfunction, can be improved by well-designed computerized cognitive training, resulting in better quality of life. Video Abstract: Schizophrenia patients suffer from an impaired inability to distinguish internal information from external experience. Subramaniam et al. find computerized cognitive training in schizophrenics improves this reality monitoring with increased mPFC activity, predicting better social function 6 months later.