The electrical activity in the electroencephalogram (EEG) and the event-related potentials extracted from the EEG provide the greatest temporal resolution for examining brain function. When coupled with the high spatial resolution of structural magnetic resonance imaging (sMRI), the combined techniques provide a powerful tool for neuroscience in the examination of brain abnormalities in major psychiatric illnesses. Over the last 20 years, our work has examined brain structure and function in schizophrenia. Both EEG and MRI measures have indicated profound abnormalities in schizophrenia within the temporal lobe, particularly marked over the left hemisphere. Our studies of patients first hospitalized due to psychosis revealed the early course of the disease to be characterized by progressive impairment and cortical gray matter reduction, most intense near the time of first hospitalization. Knowledge of those locations and brain signals affected early should help understand the basic physiological defect underlying this progression, with potential implications for new therapeutic interventions.