Exercise and sports are increasingly being implemented in the management of schizophrenia. The process of action perception is as important as that of motor execution for learning and acquiring new skills. Recent studies have suggested that body-selective extrastriate body area (EBA) in the posterior temporal-occipital cortex is involved not only in static visual perception of body parts but also in the planning, imagination, and execution of actions. However, functional abnormality of the EBA in schizophrenia has yet to be investigated. Using functional magnetic resonance imaging (fMRI) with a task designed to activate the EBA by sports-related actions, we aimed to elucidate functional abnormality of the EBA during observation of sports-related actions in patients with schizophrenia. Twelve schizophrenia patients and 12 age-sex-matched control participants participated in the study. Using sports-related motions as visual stimuli, we examined brain activations during observation of context-congruent actions relative to context-incongruent actions by fMRI. Compared with controls, the patients with schizophrenia demonstrated diminished activation in the EBA during observation of sports-related context-congruent actions. Furthermore, the EBA activation in patients was negatively correlated with the severity of negative and general psychopathology symptoms measured by the Positive and Negative Syndrome Scale. Dysfunction of the EBA might reflect a difficulty in representing dynamic aspects of human actions and possibly lead to impairments of simulation, learning, and execution of actions in schizophrenia.