Three groups of families, each consisting of a father, mother, and hospitalized child, were tested with a battery of perceptual and cognitive tasks. Eight of the children were diagnosed as paranoid schizophrenics, eight were diagnosed as nonparanoid schizophrenics, and eight (control group) were diagnosed as character disorder, depressive reaction, or adjustment reaction of adolescence. Families of schizophrenics had lower mean scores for the Schipley-Hartford Abstraction scale, showed more frequent overexclusions on Epstein's inclusion test, and showed substantially reduced reversal rates on reversible figures. As a unit, most families with schizophrenics have an inability to discern the underlying pattern or deep structure in an array of ordered stimuli; they rigidly apply limited or conservative generalization in construing the environment in order to impose stability on it; and they show a strong preference for conventional rather than personal reality.