Individuals with schizophrenia exhibit impaired social cognition, which manifests as difficulties in identifying emotions, feeing connected to others, inferring people's thoughts and reacting emotionally to others. These social cognitive impairments interfere with social connections and are strong determinants of the degree of impaired daily functioning in such individuals. Here, we review recent findings from the fields of social cognition and social neuroscience and identify the social processes that are impaired in schizophrenia. We also consider empathy as an example of a complex social cognitive function that integrates several social processes and is impaired in schizophrenia. This information may guide interventions to improve social cognition in patients with this disorder.