Patients with schizophrenia have repeatedly shown deficits in visual processing. These deficits have been well documented using visual backward masking (VBM). The VBM deficit in schizophrenia is thought to be due to aberrant interactions between magnocellular (M) and parvocellular (P) visual pathways. To date, no study has studied these claims with rigorous stimuli isolating M and P pathway responses. This study examined the function of each pathway and their interactions by creating M- and P-biased targets based on their known physiological properties. The M system responds to very low luminance contrast whereas the P system does not, and the P system responds to color contrast whereas the M system generally does not. Thus, to activate the P system, target letters and masks utilized color contrast, and to activate the M system, target letters and masks utilized very low luminance contrast. Four conditions were presented such that M- and P-biased targets were paired with both M- and P-biased masks. A significant Group x Mask Condition interaction was found when a P target was used in combination with an M or P mask, but not when an M target was used. In particular, schizophrenia patients needed significantly longer interstimulus intervals (ISIs) than controls to escape from masking in the P target/M mask condition, but not in any of the other three conditions. In addition, the critical stimulus durations (CSDs) for unmasked stimuli were significantly increased for both M and P targets in patients relative to controls. These findings demonstrate a significant impairment in M, but not P pathway, function in patients with schizophrenia. Furthermore, deficits of letter identification, including those of P targets, may also reflect impairment of the M pathway given the priming function of the dorsal stream.