Electrophysiological research has shown clear dysfunction of early visual processing mechanisms in patients with schizophrenia. In particular, the P1 component of the visual evoked potential (VEP) is substantially reduced in amplitude in patients. A novel visual evoked response known as the VESPA (Visual Evoked Spread Spectrum Analysis) was recently described. This response has a notably different scalp topography from that of the traditional VEP, suggesting preferential activation of a distinct subpopulation of cells. As such, this method constitutes a potentially useful candidate for investigating cellular contributions to early visual processing deficits. In this paper we compare the VEP and VESPA responses between a group of healthy control subjects and a group of schizophrenia patients. We also introduce an extension of the VESPA method to incorporate nonlinear processing in the visual system. A significantly reduced P1 component was found in patients using the VEP (with a large effect size; Cohen's d= 1.6), while there was no difference whatsoever in amplitude between groups for either the linear or nonlinear VESPA. This pattern of results points to a highly specific cellular substrate of early visual processing deficits in schizophrenia, suggesting that these deficits are based on dysfunction of magnocellular pathways with parvocellular processing remaining largely intact. (C) 2007 Elsevier B.V. All rights reserved.