Auditory verbal hallucinations (AVH) are a typical feature of schizophrenia, a psychiatric disorder characterised by impaired ties with reality. Two major theories that attempt to explain the neurobiology of hallucinations involve the bottom-up theory (relating to impairment in auditory processing) and the top-down theory (relating to an impairment in internal monitoring). Self-agency, a sense of ownership of one's actions, is hypothesised to be impaired in schizophrenia in accordance with the "top-down" perspective. Using advanced neuroimaging methods like functional magnetic resonance imaging (fMRI), one can probe the underlying mechanism of self-agency and its possible failure in patients experiencing AVH. This will not only shed light on the neurobiology of schizophrenia and AVH, but also generate insight into the neural correlates of self. In this chapter, we discuss self-agency and its possible failure in patients with schizophrenia experiencing AVH. We review various fMRI studies that have been employed to study AVH and discuss methodological considerations which one needs to keep in mind when devising such experiments. Finally, we introduce a novel fMRI paradigm—hallucination attention modulation task (HAMT) to study the neural correlates of AVH and discuss some preliminary results from our pilot study which link AVH to an underlying disorder of self-agency.