Patients with schizophrenia exhibit deficient response monitoring as indexed by blunted activation of the dorsal anterior cingulate cortex (dACC) and functionally related regions during error commission. This pattern may reflect heritable alterations of dACC function. We examined whether the hypofunctional 677C>T variant in MTHFR, a candidate schizophrenia risk gene, contributed to our previous findings of blunted error-related dACC activation and reduced microstructural integrity of dACC white matter. Eighteen medicated outpatients with schizophrenia underwent diffusion tensor imaging and performed an antisaccade paradigm during functional magnetic resonance imaging (fMRI). T allele carriers exhibited significantly less error-related activation than C/C patients in bilateral dACC and substantia nigra, regions that are thought to mediate dopamine-dependent error-based reinforcement learning. T carrier patients also showed significantly lower fractional anisotropy in bilateral dACC. These findings suggest that the MTHFR 677T allele blunts response monitoring in schizophrenia, presumably via effects on dopamine signaling and dACC white matter microstructural integrity.