Background The methylenetetrahydrofolate reductase (MTHFR) C677T polymorphism has been associated with both overall schizophrenia risk and severity of negative symptoms. This study examined whether schizophrenia patients homozygous for the risk allele (T/T) exhibit greater impairment in executive function, and determined the extent to which MTHFR's effects on negative symptoms underlie this relationship. Methods 200 outpatients with chronic schizophrenia were evaluated with the Verbal Fluency Test (VFT), Wisconsin Card Sort Test (WCST), and California Verbal Learning Test (CVLT). Performance was stratified by MTHFR C667T genotype. Path analysis determined the extent to which MTHFR effects on negative symptoms mediated the relationship between genotype and cognitive measures. Results T/T subjects exhibited significantly greater deficits on the VFT and had more difficulty achieving the first category on the WCST. Genotype groups did not differ in CVLT performance. C677T effects on negative symptoms contributed to, but did not fully account for, genotype effects on VFT. Negative symptoms did not mediate WCST performance. Conclusions MTHFR C677T genotype contributes to certain executive function deficits in schizophrenia. These deficits remained significant when taking into account mediating effects of negative symptoms. Although the intermediate mechanisms for C677T effects remain uncertain, these results suggest that MTHFR-related cognitive impairment and negative symptoms reflect differing neural substrates.