© 2014 Published by Elsevier Inc. Although sensory processing abnormalities contribute to widespread cognitive and psychosocial impairments in schizophrenia (SZ) patients, scalp-channel measures of averaged event-related potentials (ERPs) mix contributions from distinct cortical source-area generators, diluting the functional relevance of channel-based ERP measures. SZ patients (n = 42) and non-psychiatric comparison subjects (n = 47) participated in a passive auditory duration oddball paradigm, eliciting a triphasic (Deviant-Standard) tone ERP difference complex, here termed the auditory deviance response (ADR), comprised of a mid-frontal mismatch negativity (MMN), P3a positivity, and re-orienting negativity (RON) peak sequence. To identify its cortical sources and to assess possible relationships between their response contributions and clinical SZ measures, we applied independent component analysis to the continuous 68-channel EEG data and clustered the resulting independent components (ICs) across subjects on spectral, ERP, and topographic similarities. Six IC clusters centered in right superior temporal, right inferior frontal, ventral mid-cingulate, anterior cingulate, medial orbitofrontal, and dorsal mid-cingulate cortex each made triphasic response contributions. Although correlations between measures of SZ clinical, cognitive, and psychosocial functioning and standard (Fz) scalp-channel ADR peak measures were weak or absent, for at least four IC clusters one or more significant correlations emerged. In particular, differences in MMN peak amplitude in the right superior temporal IC cluster accounted for 48% of the variance in SZ-subject performance on tasks necessary for real-world functioning and medial orbitofrontal cluster P3a amplitude accounted for 40%/54% of SZ-subject variance in positive/negative symptoms. Thus, source-resolved auditory deviance response measures including MMN may be highly sensitive to SZ clinical, cognitive, and functional characteristics.