Theory and experimental evidence suggest that complex living systems function close to the boundary of chaos, with erroneous organization to an improper dynamical range (too stiff or chaotic) underlying system-wide dysregulation and disease. We hypothesized that erroneous organization might therefore also characterize paranoid schizophrenia, via optimization abnormalities in the prefrontal-limbic circuit regulating emotion. To test this, we acquired fMRI scans from 35 subjects (N = 9 patients with paranoid schizophrenia and N = 26 healthy controls), while they viewed affect-valent stimuli. To quantify dynamic regulation, we analyzed the power spectrum scale invariance (PSSI) of fMRI time-courses and computed the geometry of time-delay (Poincaré) maps, a measure of variability. Patients and controls showed distinct PSSI in two clusters (k1: Z = 4.3215, P = 0.00002 and k2: Z = 3.9441, P = 0.00008), localized to the orbitofrontal/medial prefrontal cortex (Brodmann Area 10), represented by β close to white noise in patients (β ≈ 0) and in the pink noise range in controls (β ≈ −1). Interpreting the meaning of PSSI differences, the Poincaré maps indicated less variability in patients than controls (Z = −1.9437, P = 0.05 for k1; Z = −2.5099, P = 0.01 for k2). That the dynamics identified Brodmann Area 10 is consistent with previous schizophrenia research, which implicates this area in deficits of working memory, executive functioning, emotional regulation and underlying biological abnormalities in synaptic (glutamatergic) transmission. Our results additionally cohere with a large body of work finding pink noise to be the normal range of central function at the synaptic, cellular, and small network levels, and suggest that patients show less supple responsivity of this region. Hum Brain Mapp, 2011. © 2011 Wiley-Liss, Inc.