Neuropsychological research of schizophrenia indicates an impairment of episodic memory. It has been hypothesized that this impairment might arise from encoding deficits based on relational binding of associative information. Evidence shows that memory involving contextual association is disproportionately impaired in schizophrenia. Similarly, poor performances are also evoked in tasks where memory performance is based on controlled processes that support these memories, whereas more automatic processes of familiarity are relatively intact. The process-dissociation procedure paradigm developed by Jacoby and colleagues has been used to provide evidence of independence in these systems and estimate their contributions in memory tasks. The current study uses this procedure to estimate the effects of automatic and controlled influences on 1) Contextual organisation for successful retrieval; and 2) Use of beneficial strategies using the level-of-processing paradigm. The results using demonstrated reduced recollection familiarity among individuals with schizophrenia in conditions that did not support strategic use of context. This is consistent with the hypothesis of a specific context-processing deficit in schizophrenia.