This study aimed to investigate the relationship between measures of clinical symptom severity and sleep EEG parameters in a relatively diagnostically homogeneous group of patients with schizophrenia. We obtained sleep EEG data in 15 drug-free inpatients who met DSM-IV-R criteria for schizophrenia, undifferentiated type, with 15 age- and sex-matched normal controls over two consecutive night polysomnographic recordings. Clinical symptoms were assessed by the Positive and Negative Symptom Scale (PANSS) and Hamilton Rating Scale for Depression. Characteristic features of sleep disturbance were seen in patients with schizophrenia: profound difficulties in sleep initiation and maintenance, poor sleep efficiency, a slow wave sleep (SWS) deficit, and an increased REM density. SWS was inversely correlated with cognitive symptoms. REM density was inversely correlated with positive, cognitive, and emotional discomfort symptoms as well as PANSS total score. Our data demonstrate that drug-free patients with chronic undifferentiated type schizophrenia suffer from profound disturbances in sleep continuity and sleep architecture. Both the SWS deficit and cognitive impairment found in schizophrenics in this study may relate to similar underlying structural brain abnormalities.