Although anecdotal and correlational results have suggested a reliable relationship between creativity and psychosis, few studies have examined this relationship using empirical methods. In addition, little is known about the neural substrates of creative thinking. We investigated the creative thinking process in relation to schizotypal personality, schizophrenia and prefrontal hemispheric laterality using behavioral and near-infrared optical spectroscopy (NIRS) methods. Schizophrenic, psychometrically ascertained schizotypal, and healthy control subjects (all right-handed) participated in a novel "alternate uses" task designed to assess divergent thinking (DT) ability. The DT task required subjects to generate "uses" for conventional and ambiguous objects. Prefrontal activity was measured using NIRS while subjects were engaged in DT vs. a cognitive control task in a subset of the subjects. Behavioral data indicated that schizotypes had enhanced DT ability compared with schizophrenic and control subjects, who showed similar performance overall. NIRS data showed that DT was associated with bilateral prefrontal cortex (PFC) activation, but the right PFC particularly contributed to the enhanced creative thinking in psychometric schizotypes compared with the other two groups. Thus, creative thinking seems to robustly recruit bilateral PFC, but it is the right PFC that is preferentially activated in schizotypes in relation to their enhanced DT.