Schizophrenia is associated with mentalizing deficits that impact on social functioning and quality of life. Recently, schizophrenia has been conceptualized as a disorder of neural connectivity. Network level analysis offers a means of understanding the underlying deficits leading to mentalizing difficulty. Using an established mentalizing task (The Triangles Task), functional magnetic resonance images (fMRI) were acquired from 19 patients with schizophrenia and 17 age- and sex-matched healthy controls (HCs). Participants were required to watch short animations of two triangles interacting with each other. The interactions could be perceived as either random (no interaction), physical (patterned movement), or mental (intentional movement). Task-based Partial Least Squares (PLS) was used to analyze activation differences and commonalities between the three conditions and the two groups. Seed-based PLS was used to assess functional connectivity with peaks identified in the task-based PLS. Behavioural PLS was then performed using the accuracy from the mental conditions. Patients with schizophrenia performed worse on the mentalizing condition compared to HCs. Task-based PLS revealed one significant latent variable (LV) that explained 42.9% of the variance in the task. This LV separated the mental condition from the physical and random conditions in patients with schizophrenia, but only the mental from physical in healthy controls. The mental animations were associated with increased activity in the inferior frontal gyri bilaterally, left superior temporal gyrus, right postcentral gyrus, and left caudate nucleus. The physical/random animations were associated with increased activity in the right medial frontal gyrus and left superior frontal gyrus. Seed-based PLS identified increased functional connectivity with the left inferior frontal gyrus (liFG) and caudate nucleus in patients with schizophrenia, during the mental and physical interactions, with functional connectivity with the LiFG associated with increased performance on the mental animations. The results suggest that mentalizing deficits in schizophrenia may arise due to inefficient social brain networks.