We assessed levels of communication disturbance by counting the frequency of unclear linguistic references in the speech of 10 stable schizophrenic outpatients, 18 of their “unaffected” parents, and 10 nonpsychiatric controls, in affectively negative versus affectively positive conditions. Patient and parent groups scored approximately equally on the reference performance measure in the positive condition, and significantly more poorly than controls. Patients' speech deteriorated significantly in the negative condition, while parents' and controls' speech did not. The degree to which patients' speech was reactive to negative affect corresponded to the severity of their core positive symptoms of delusions and hallucinations. Poor reference performance in parents predicted poor performance and a more severe history of positive symptoms in their patient offspring. These data support the hypothesis that poor reference performance represents a vulnerability marker for schizophrenia, and that affective reactivity of language symptoms is associated with an underlying positive schizophrenic process