summary This paper provides a review of recent research into the cognitive basis of hallucinations in schizophrenia. Two approaches are distinguished, implying a central role of top-down perceptual information processing and metacognitive control processes, respectively. Both approaches start from the assumption that hallucinations consist of internally generated information that is erroneously attributed to an external source. Findings from functional neuroimaging studies are integrated in the evaluation of the different hypotheses. Although there has been progress in the empirical research, it is too early yet to draw definitive conclusions about the cognitive basis of hallucinations. Future research must also address the emotional significance of hallucinations.