Substantial evidence implicates working memory (WM) as a core deficit in schizophrenia (SCZ), purportedly due to primary deficits in dorsolateral prefrontal cortex functioning. Recent findings suggest that SCZ is also associated with abnormalities in suppression of certain regions during cognitive engagement—namely the default mode system—that may further contribute to WM pathology. However, no study has systematically examined activation and suppression abnormalities across both encoding and maintenance phases of WM in SCZ. Twenty-eight patients and 24 demographically matched healthy subjects underwent functional magnetic resonance imaging at 3T while performing a delayed match-to-sample WM task. Groups were accuracy matched to rule out performance effects. Encoding load was identical across subjects to facilitate comparisons across WM phases. We examined activation differences using an assumed model approach at the whole-brain level and within meta-analytically defined WM areas. Despite matched performance, we found regions showing less recruitment during encoding and maintenance for SCZ subjects. Furthermore, we identified 2 areas closely matching the default system, which SCZ subjects failed to deactivate across WM phases. Lastly, activation in prefrontal regions predicted the degree of deactivation for healthy but not SCZ subjects. Current results replicate and extend prefrontal recruitment abnormalities across WM phases in SCZ. Results also indicate deactivation abnormalities across WM phases, possibly due to inefficient prefrontal recruitment. Such regional deactivation may be critical for suppressing sources of interference during WM trace formation. Thus, deactivation deficits may constitute an additional source of impairments, which needs to be further characterized for a complete understanding of WM pathology in SCZ.