Abstract Impairments in attentional, working memory and sensorimotor processing have been consistently reported in schizophrenia. However, the interaction between cognitive and sensorimotor impairments and the underlying neural mechanisms remains largely uncharted. We hypothesized that altered attentional processing in patients with schizophrenia, probed through saccadic inhibition, would partly explain impaired sensorimotor control and would be reflected as altered task-dependent modulation of cortical excitability and inhibition. Twenty-five stabilized patients with schizophrenia, 17 unaffected siblings and 25 healthy control subjects were recruited. Subjects performed visuomotor grip force-tracking alone (single-task condition) and with increased cognitive load (dual-task condition). In the dual-task condition, two types of trials were randomly presented: trials with visual distractors (requiring inhibition of saccades) or trials with addition of numbers (requiring saccades and addition). Both dual-task trial types required divided visual attention to the force-tracking target and to the distractor or number. Gaze was measured during force-tracking tasks, and task-dependent modulation of cortical excitability and inhibition were assessed using transcranial magnetic stimulation. In the single-task, patients with schizophrenia showed increased force-tracking error. In dual-task distraction trials, force-tracking error increased further in patients, but not in the other two groups. Patients inhibited fewer saccades to distractors, and the capacity to inhibit saccades explained group differences in force-tracking performance. Cortical excitability at rest was not different between groups and increased for all groups during single-task force-tracking, although, to a greater extent in patients (80%) compared to controls (40%). Compared to single-task force-tracking, the dual-task increased cortical excitability in control subjects, whereas patients showed decreased excitability. Again, the group differences in cortical excitability were no longer significant when failure to inhibit saccades was included as a covariate. Cortical inhibition was reduced in patients in all conditions, and only healthy controls increased inhibition in the dual-task. Siblings had similar force-tracking and gaze performance as controls but showed altered task-related modulation of cortical excitability and inhibition in dual-task conditions. In patients, neuropsychological scores of attention correlated with visuomotor performance and with task-dependant modulation of cortical excitability. Disorganization symptoms were greatest in patients with weakest task-dependent modulation of cortical excitability. This study provides insights into neurobiological mechanisms of impaired sensorimotor control in schizophrenia showing that deficient divided visual attention contributes to impaired visuomotor performance and is reflected in impaired modulation of cortical excitability and inhibition. In siblings, altered modulation of cortical excitability and inhibition is consistent with a genetic risk for cortical abnormality.