This study examines EEG low frequency characteristics which have been linked to specific cognitive functions such as stimulus encoding and attention during an auditory oddball task in schizophrenia patients and healthy controls. EEG data was recorded from 17 young schizophrenia patients in a stable phase of their illness and 17 healthy controls performing an auditory oddball task. Evoked and induced delta and theta activity, N100, P300 amplitude were computed. Between 200-500 ms after a stimulus was presented, patients displayed significantly reduced P300, less evoked and induced delta and theta activity than controls. We conclude that the well known finding of P300 reduction in schizophrenia can be linked to reductions in delta and theta activity, which are a manifestation of impaired stimulus evaluation, memory retrieval, and a lack of sustained attention.