Social anxiety is highly prevalent in individuals with schizophrenia, with studies suggesting rates of 30%. This study aimed at determining if social anxiety is linked to specific emotion recognition deficits and to specific social functioning deficits. A total of 47 participants with a diagnosis of schizophrenia and receiving outpatient services answered measures of facial recognition (Ekman; Facial Emotion Identification Test), facial discrimination (Facial Emotion Discrimination Test), role-play, social anxiety (Social Interaction Anxiety Scale and Brief Social Phobia Scale), psychiatric symptoms (Brief Psychiatric Rating Scale), self-esteem (Self-Esteem Rating Scale–Short Form), and social functioning (Social Functioning Scale). A total of 22 (47%) participants were rated as socially anxious. Those with social anxiety had worse social functioning in the domains of interpersonal communication (t[45] = 2.28, p = 0.025) and engagement (in conversations) (t[45] = 2.89, p = 0.000) and had lower self-esteem (t[45] = 4.05, p = 0.001). Participants with social anxiety also had more difficulties in recognizing neutral emotional faces (t[31] = 2.19, p = 0.036). More studies are warranted to better understand the link between neutral expression recognition and social anxiety in schizophrenia.