Background Deficits in backward masking have been variably reported in schizophrenia patients, but individual differences in the expression of these deficits have not been explicitly investigated. In addition, increased knowledge of the visual system has opened the door for new techniques such as transcranial magnetic stimulation (TMS) to explore these deficits physiologically. Methods Patients with schizophrenia and healthy controls were tested using a backward masking paradigm. In order to examine the functionality of visual pathways involved in backward masking, subjects were retested on a backward masking paradigm using single pulse TMS applied to occipital cortex in lieu of the masking stimuli. Results Compared with controls, patients had significantly delayed recovery from visual backward masking. However, 23.5% of patients (compared to 5% of controls) never recovered to levels approaching unmasked performance. When these subjects were segregated from the analysis, group differences vanished. In addition, stimulus masking with occipital TMS followed the same pattern in both patients and controls. Conclusions Observations of individual differences in visual masking performance may identify a subgroup of schizophrenia patients. The TMS data suggest that this deficit may not localize to the occipital cortex. However, TMS can be a useful tool for localizing processing deficits in schizophrenia.