It is suggested that schizophrenic thought disorder comprises four relatively independent components: delusion; intrinsic thinking disturbance; formal thought disorder; and deficient real-world knowledge – a new concept. Schizophrenic and neurotic control subjects were given tests of thinking, perception, appreciation of conversational discourse, and social and practical knowledge. Not all deluded schizophrenics had intrinsic thinking disturbance. Those that did tended to have overinclusive categorisation as the most apparent deficit. Formal thought disorder was associated with a poor performance on the test of conversational discourse. The most striking result was that 75% of schizophrenic patients were markedly deficient, relative to neurotic patients, on their knowledge of everyday social issues.