Theoretical principles of information processing and empirical findings suggest that to efficiently represent all possible rewards in the natural environment, reward-sensitive neurons have to adapt their coding range dynamically to the current reward context. Adaptation ensures that the reward system is most sensitive for the most likely rewards, enabling the system to efficiently represent a potentially infinite range of reward information. A deficit in neural adaptation would prevent precise representation of rewards and could have detrimental effects for an organism's ability to optimally engage with its environment. In schizophrenia, reward processing is known to be impaired and has been linked to different symptom dimensions. However, despite the fundamental significance of coding reward adaptively, no study has elucidated whether adaptive reward processing is impaired in schizophrenia. We therefore studied patients with schizophrenia (n=27) and healthy controls (n=25), using functional magnetic resonance imaging in combination with a variant of the monetary incentive delay task. Compared with healthy controls, patients with schizophrenia showed less efficient neural adaptation to the current reward context, which leads to imprecise neural representation of reward. Importantly, the deficit correlated with total symptom severity. Our results suggest that some of the deficits in reward processing in schizophrenia might be due to inefficient neural adaptation to the current reward context. Furthermore, because adaptive coding is a ubiquitous feature of the brain, we believe that our findings provide an avenue in defining a general impairment in neural information processing underlying this debilitating disorder.