Background Schizophrenia (SZ) patients' low scores on the Wisconsin Card Sorting Test (WCST) are often attributed to frequent perseverative errors, a pattern typically interpreted as a failure to shift from previously rewarded behavior in response to negative feedback. In this study we tested the hypothesis that SZ patients, due to dysregulated error-processing mechanisms, are more fundamentally impaired in their on-line, trial-to-trial use of feedback to guide behavior. Methods Analysis of archival WCST data from 145 adults with schizophrenia and 80 healthy comparison subjects. Results Schizophrenia patients' impaired use of negative feedback was evident on the first four WCST cards, where they were significantly less accurate than comparison subjects. Performance on these early cards significantly predicted overall task success as indexed by categories completed and proportion of perseverative errors. Conclusions Patients' poor performance on pre-shift WCST trials likely reflects a fundamental impairment in the ability to use feedback to guide behavior. Recent data from both humans and primates suggest that reward-based learning processes like those employed in the WCST are driven by phasic changes in midbrain dopamine activity. It might, therefore, be possible to interpret higher order executive dysfunction in schizophrenia as a manifestation of altered DA signaling.