Lack of insight (unawareness of illness) is a common and clinically relevant feature of schizophrenia. Reduced levels of self-referential processing have been proposed as a mechanism underlying poor insight. The default mode network (DMN) has been implicated as a key node in the circuit for self-referential processing. We hypothesized that during resting state the DMN network would show decreased connectivity in schizophrenia patients with poor insight compared to patients with good insight. Patients with schizophrenia were recruited from mental health care centers in the north of the Netherlands and categorized in groups having good insight (n = 25) or poor insight (n = 19). All subjects underwent a resting state fMRI scan. A healthy control group (n = 30) was used as a reference. Functional connectivity of the anterior and posterior part of the DMN, identified using Independent Component Analysis, was compared between groups. Patients with poor insight showed lower connectivity of the ACC within the anterior DMN component and precuneus within the posterior DMN component compared to patients with good insight. Connectivity between the anterior and posterior part of the DMN was lower in patients than controls, and qualitatively different between the good and poor insight patient groups. As predicted, subjects with poor insight in psychosis showed decreased connectivity in DMN regions implicated in self-referential processing, although this concerned only part of the network. This finding is compatible with theories implying a role of reduced self-referential processing as a mechanism contributing to poor insight.