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The mismatch negativity (MMN) event-related potential (ERP) indexes relatively automatic detection of changes in sensory stimuli and is typically attenuated in individuals with schizophrenia. However, contributions of different frequencies of electroencephalographic (EEG) activity to the MMN and the later P3a attentional orienting response in schizophrenia are poorly understood and were the focus of the present study. Participants with a schizophrenia-spectrum disorder ( n = 85) and non-psychiatric control participants ( n = 74) completed a passive auditory oddball task containing 10% 50 ms “deviant” tones and 90% 100 ms “standard” tones. EEG data were analyzed using spatial principal component analysis (PCA) applied to wavelet-based time-frequency analysis and MMN and P3a ERPs. The schizophrenia group compared to the control group had smaller MMN amplitudes and lower deviant-minus-standard theta but not alpha event-related spectral perturbation (ERSP) after accounting for participant age and sex. Larger MMN and P3a amplitudes but not latencies were correlated with greater theta and alpha time-frequency activity. Multiple linear regression analyses revealed that control participants showed robust relationships between larger MMN amplitudes and greater deviant-minus-standard theta inter-trial coherence (ITC) and between larger P3a amplitudes and greater deviant-minus-standard theta ERSP, whereas these dynamic neural processes were less tightly coupled in participants with a schizophrenia-spectrum disorder. Study results help clarify frequency-based contributions of time-domain (ie, ERP) responses and indicate a potential disturbance in the neural dynamics of detecting change in sensory stimuli in schizophrenia. Overall, findings add to the growing body of evidence that psychotic illness is associated with widespread neural dysfunction in the theta frequency band.