Background: Schizophrenia affects around 1% of the global population. Functional connectivity extracted from resting-state functional magnetic resonance imaging (rs-fMRI) has previously been used to study schizophrenia and has great potential to provide novel insights into the disorder. Some studies have shown abnormal functional connectivity in the default mode network (DMN) of individuals with schizophrenia, and more recent studies have shown abnormal dynamic functional connectivity (dFC) in individuals with schizophrenia. However, DMN dFC and the link between abnormal DMN dFC and symptom severity have not been well-characterized. Method: Resting-state fMRI data from subjects with schizophrenia (SZ) and healthy controls (HC) across two datasets were analyzed independently. We captured seven maximally independent subnodes in the DMN by applying group independent component analysis and estimated dFC between subnode time courses using a sliding window approach. A clustering method separated the dFCs into five reoccurring brain states. A feature selection method modeled the difference between SZs and HCs using the state-specific FC features. Finally, we used the transition probability of a hidden Markov model to characterize the link between symptom severity and dFC in SZ subjects. Results: We found decreases in the connectivity of the anterior cingulate cortex (ACC) and increases in the connectivity between the precuneus (PCu) and the posterior cingulate cortex (PCC) (i.e., PCu/PCC) of SZ subjects. In SZ, the transition probability from a state with weaker PCu/PCC and stronger ACC connectivity to a state with stronger PCu/PCC and weaker ACC connectivity increased with symptom severity. Conclusions: To our knowledge, this was the first study to investigate DMN dFC and its link to schizophrenia symptom severity. We identified reproducible neural states in a data-driven manner and demonstrated that the strength of connectivity within those states differed between SZs and HCs. Additionally, we identified a relationship between SZ symptom severity and the dynamics of DMN functional connectivity. We validated our results across two datasets. These results support the potential of dFC for use as a biomarker of schizophrenia and shed new light upon the relationship between schizophrenia and DMN dynamics.