In order to investigate EEG biomarkers of auditory processing for schizophrenia, we studied a group with a well known high-risk profile: patients with 22q11.2 deletion syndrome have a 30% risk of developing schizophrenia during adulthood. We performed high-density EEG source imaging to measure auditory gating of the P50 component and middle to late latency auditory processing in 21 participants with the 22q11.2 deletion and 17 age-matched healthy controls. While we found no indication of altered P50 suppression in 22q11DS, we observed marked differences for the first N1 component with increased amplitudes on central electrodes, corresponding to increased activations in dorsal anterior cingulate and medial frontal cortex (p<0.01). We also found a left lateralized reduction of activation of primary and secondary auditory cortex during the second N1 (120ms) and the P2 component in 22q11DS (p<0.01). Our results show that sensory gating and activations until 50ms were preserved in 22q11DS, while impairments appear at latencies that correspond to higher order auditory processing. While the increased activation of cingulate and medial frontal cortex could reflect developmental changes in 22q11DS, the reduced activity seen in left auditory cortex might serve as a biomarker for the development of schizophrenia, if confirmed by longitudinal research protocols.