Research investigating the association between negative symptoms and plasma cortisol levels in individuals with schizophrenia has produced inconsistent findings. This study investigated whether deficit syndrome schizophrenia (characterized by high levels of primary negative symptoms) is associated with comparatively high morning plasma cortisol levels, more negative appraisals about illness and higher levels of depression. Participants were 85 individuals diagnosed with schizophrenia and 85 individuals with no history of contact with psychiatric services matched for age and gender. All participants provided fasting 9.00 a.m. plasma cortisol samples. There were no significant differences between the schizophrenia and control participants in plasma cortisol levels. The Proximal Deficit Syndrome method was used to identify individuals with deficit syndrome schizophrenia. Contrary to what had been hypothesized, participants with deficit syndrome schizophrenia had significantly lower plasma cortisol levels than both non-deficit syndrome participants and control participants. Participants with the deficit syndrome reported significantly less negative appraisals about illness (assessed by PBIQ) and lower levels of depression (assessed by BDI-II). Differences in cortisol levels continued to trend toward significance when levels of depression were controlled for. The patterns of illness-related appraisals and plasma cortisol levels raise the possibility that the deficit syndrome could be a form of adaptation syndrome.