A reformulation of the Social Brain Theory of schizophrenia is proposed that contends that schizophrenia is a novel human phenomenon that arose following the establishment of large permanent human settlements and the abandonment of the hunter-gatherer way of life. It is contended that the blurring of the demarcation between ingroup and outgroup membership and living in close proximity to strangers is a stressor that leads to perturbation in the development of the social brain in vulnerable individuals leading to the syndrome of schizophrenia. Contrary to previous authors who have considered schizophrenia to be an inherently human condition that has existed throughout human history we suggest that schizophrenia is a relatively recent phenomenon and that the vulnerability to it remained hidden amongst hunter-gatherers. Hence, we contend that schizophrenia is the result of a mismatch between the post-Neolithic human social environment and the design of the social brain. The importance of the distinction between ingroup and outgroup membershipin human evolutionary history lies at the heart of inter-group conflict, violence and xenophobia. This formulation explains a range of epidemiological findings on schizophrenia related to the risk of migration and urbanisation. The present hypothesis can therefore, account for a range of disparate findings regarding schizophrenia that have thus far defied explanation by other extant theories. However, as this formulation claims to have identified the ultimate causation of schizophrenia the hypothesis does not specify the proximate mechanisms that lead to it. We conclude with a number of testable and refutable predictions.