It is hypothesized that due to an abnormal functioning of the reward system patients with schizophrenia form context-inappropriate associations. It has been shown that the dopamine target regions, especially the ventral striatum, are critical in the formation of reward associations. We wanted to examine how the ventral striatum responds as patients learn reward-related associations and how this neural response is linked to objective and subjective behavioral measures. Functional magnetic resonance imaging (fMRI) Blood oxygen level dependent (BOLD) responses were examined using aversive Pavlovian learning in 13 medicated patients with schizophrenia and 13 matched healthy controls. Colored circles served as conditioned stimulus (CS+) while a loud, individually adjusted, noise served as the unconditioned stimulus. Circles of another color served as neutral comparators (CS-). Subjective indices were assessed by a post-scan self-report, and galvanic skin responses (GSR) were used as objective measures of associative learning. fMRI data were analyzed using a random effects model in SPM2. Patients showed inappropriately strong activations in the ventral striatum in response to the neutral stimulus (CS-) as compared to the healthy controls. Consistent with this neural evidence of aberrant learning, patients also showed evidence of abnormal learning by self-report and as indexed by GSR. The main finding here is that patients with schizophrenia, when exposed to neutral stimuli in a threatening situation, show an abnormal pattern of learning. The aberrant activations and response are consistent with the idea that patients aberrantly assign motivational salience to neutral stimuli, and this process may be one of the aberrations that predisposes them to psychosis.