Schizophrenia is a tenacious psychiatric disorder thought to result from synaptic dysfunction. While symptomatology is traditionally divided into positive and negative symptoms, abnormal social cognition is now recognized a key component of schizophrenia. Nonetheless, we are still lacking a mechanistic understanding of how aberrant synaptic connectivity is expressed in schizophrenia during social perception and how it relates to positive and negative symptomatology. We used fMRI and dynamic causal modelling (DCM) to test for abnormalities in synaptic efficacy in twenty-four patients with first-episode schizophrenia (FES) compared to twenty-five matched controls performing the Human Connectome Project (HCP) social cognition paradigm. Patients had not received regular therapeutic antipsychotics, but were not completely drug naïve. Our data reveal an increase in excitatory feedforward connectivity from motion-sensitive V5 to posterior superior temporal sulcus (pSTS) in patients compared to matched controls. At the same time, were less accurate than controls in judging social stimuli from non-social stimuli. Crucially, patients with a higher degree of positive symptoms had more disinhibition within pSTS, a region computationally involved in Theory of Mind. We interpret these within a predictive coding framework where increased feedforward connectivity may encode aberrant prediction errors from V5 to hierarchically higher pSTS and local disinhibition within pSTS may reflect aberrant encoding of the precision of cortical representations about social stimuli.