Several studies in patients with schizophrenia reported a marked reduction in sleep spindle activity. To investigate whether the reduction may be linked to genetic risk of the illness, we analysed sleep spindle activity in healthy volunteers, patients with schizophrenia and first-degree relatives, who share an enriched set of schizophrenia susceptibility genes. We further investigated the correlation of spindle activity with cognitive function in first-degree relatives and whether spindle abnormalities affect both fast (12-15 Hz) and slow (9-12 Hz) sleep spindles. We investigated fast and slow sleep spindle activity during non-rapid eye movement sleep in a total of 47 subjects comprising 17 patients with schizophrenia, 13 healthy first-degree relatives and 17 healthy volunteers. Groups were balanced for age, gender, years of education and estimated verbal IQ. A subsample of relatives received additional testing for memory performance. Compared to healthy volunteers, fast spindle density was reduced in patients with schizophrenia and healthy first-degree relatives following a pattern consistent with an assumed genetic load for schizophrenia. The deficit in spindle density was specific to fast spindles and was associated with decreased memory performance. Our findings indicate familial occurrence of this phenotype and thus support the hypothesis that deficient spindle activity relates to genetic liability for schizophrenia. Furthermore, spindle reductions predict impaired cognitive function and are specific to fast spindles. This physiological marker should be further investigated as an intermediate phenotype of schizophrenia. It could also constitute a target for drug development, especially with regard to cognitive dysfunction.