Conventional wisdom has not laid out a clear and uniform profile of schizophrenia as a unitary entity. One of the key first steps in elucidating the neurobiology of this entity would be to characterize the essential and common elements in the group of entities called schizophrenia. Kraepelin in his introduction notes ‘the conviction seems to be more and more gaining ground that dementia praecox on the whole represents, a well characterized form of disease, and that we are justified in regarding the majority of the clinical pictures which are brought together here as the expression of a single morbid process, though outwardly they often diverge very far from one another’. But what is that single morbid process? We suggest that just as the uniform defect in all types of cancer is impaired regulation of cell proliferation, the primary defect in the group of entities called schizophrenia is persistent defective hierarchical temporal processing. This manifests in the form of chronic memory-prediction errors or deficits in learning-dependent predictive perception. These deficits account for the symptoms that present as reality distortion (delusions, thought disorder and hallucinations). This constellation of symptoms corresponds with the profile of most patients currently diagnosed as suffering from schizophrenia. In this paper we describe how these deficits can lead to the various symptoms of schizophrenia.