Introduction: An impairment of visually perceiving backward masked stimuli is commonly observed in patients with schizophrenia, yet it is unclear whether this impairment is the result of a deficiency in first or higher order processing and for which subtypes of schizophrenia it is present. Methods: Here, we compare identification (first order) and metacognitive (higher order) performance in a visual masking paradigm between a highly homogenous group of young first-episode patients diagnosed with paranoid schizophrenia (N = 11) to that of carefully matched healthy controls (N = 13). Results: We find no difference across groups in first-order performance, but find a difference in metacognitive performance, particularly for stimuli with relatively high visibility. Conclusions: These results indicate that the masking deficit is present in first-episode patients with paranoid schizophrenia, but that it is primarily an impairment of metacognition.