Negative symptoms are a major impediment to functional recovery for many Veterans with schizophrenia (SCZ). Available pharmacological and psychosocial interventions show only limited benefits for these symptoms. Following recommendations from a NIMH consensus conference on identifying and addressing obstacles to this unmet treatment need, the Collaboration to Advance Negative Symptom Assessment, in which the PI has a leadership role, has validated a new interview to assess negative symptoms within two basic domains: experiential (diminished motivation and reward-seeking) and expressive (diminished expressive communication). Increasing interest has focused on the experiential symptoms. We have found that these symptoms are more strongly related to poor functioning and appear to stem from cognitive distortions, such as defeatist beliefs (e.g., Achieving a goal isn't worth the wait). Experiential symptoms are also much more amenable to translational research based on animal models of reward processing. We propose to address remaining obstacles to the development of new treatments for experiential negative symptoms in two ways. First, we will identify biobehavioral markers. Drawing on animal models, we selected reward-processing tasks that tap into distinct neural circuits to evaluate whether they: a) show hypothesized relations to symptoms and b) show sufficient longitudinal stability for use as outcome measures in clinical trials. Second, we will test an integrative model of neural and psychological mechanisms of functional outcome. We propose that brain-based reward processing deficits lead to dysfunctional beliefs that then lead to experiential symptoms and, ultimately, poor functioning. The aims of this project will be addressed in SCZ patients stratified into high (n = 80) or low (n 80) experiential negative symptom groups (based on our new clinical interview), and a healthy control sample (n = 40). Participants will complete four reward-processing tasks that involve different cortico-limbic-striatal circuits. We will use electrophysiological (EEG) tasks to assess two basic reward processes: Liking: experience of pleasure in response to rewards, and Learning: adapting one's behavior in response to ongoing rewards and punishments. Novel behavioral tasks will be used to assess to higher-level decision making processes: (3) Effort valuation: is a reward worth the effort required to obtain it? (4) Delay valuation: is a reward worth the time delay required to obtain it? Systematic research on these reward-processing components in SCZ has been rare. Based on our prior behavioral and EEG research, we hypothesize that the SCZ group with high negative symptoms will show intact Liking but impairment in one or more of the other components. The validity of the Learning, Effort, and Delay valuation tasks will be further evaluated by determining how well they predict experiential negative symptoms within an integrative model of outcome. In the pooled SCZ sample (n = 160), Structural Equation Modeling will test whether dysfunctional beliefs and experiential negative symptoms mediate the relation between brain-based reward-processing tasks on the one hand, and functional outcome on the other. Finally, all participants will be re-tested after 4-weeks (a typical interval for clinical trials) to determine whether the tasks show the high level o stability required for use as clinical trial endpoints. Results will help isolate neural circuits hat contribute to negative symptoms, establish a theoretical framework to guide preclinical and clinical research, and provide outcome measures testing innovative treatments in clinical trials.