Emerging evidence is now challenging the view that patients diagnosed with schizophrenia experience a selective deficit in their sense of agency. Additional disturbances seem to exist in their sense of body ownership. However, the factors underlying this disturbance in body ownership remain elusive. Knowledge of these factors, and increased understanding of how body ownership is related to other abnormalities seen in schizophrenia, could ultimately advance development of new treatments. Research on body ownership in schizophrenia has mainly been investigated with the rubber hand illusion (RHI). Schizophrenia patients show higher susceptibility to the RHI, which may be explained by a stronger reliance on multisensory information over weaker stored body representations. This review shows that a coherent sense of body ownership arises from the integration of both bottom-up sensory processes and higher order, top-down bodily- and perceptual representations. Multisensory integration, temporal binding, anticipation, intention and efferent signals all partly modulate the complex experience of body ownership. Specifically, we propose that patients with schizophrenia have weaker stored body representations, and rely to a greater extent on external stimuli, such as visual information, due to imprecise or highly variable internal predictions. Moreover, the reduced sense of agency in schizophrenia may additionally contribute to the disturbed sense of body ownership, as evidence from healthy participants suggests that agency and body ownership are interrelated. Vice versa, a reduced sense of body ownership may also contribute to a reduced sense of agency. Future studies should explicitly target the precise relationship between the two in schizophrenia.