The presence of visual hallucinations in addition to auditory hallucinations (V + AH) is associated with poor prognosis in patients with schizophrenia. However, little consideration has been given to these symptoms and their underlying cognitive bases remain unclear. Based on cognitive models of hallucinations, we hypothesized that V + AH are underpinned by an impairment in reality-monitoring processes. The objective of the present study was to test whether reality-monitoring deficits were associated with V + AH in schizophrenia. This study examined reality-monitoring abilities in two groups of patients with schizophrenia: a group of patients with V + AH (n = 24) and a group of patients with AH only (n = 22). Patients with V + AH were significantly more likely to misremember imagined words as being perceived from an external source, compared to patients with AH only (p = 0.008, d = -0.82). In other words, V + AH patients display a larger externalization bias than patients with AH only. One explanation for these results could be that experiencing hallucinations in two sensory modalities may contribute to increased vividness of mental imagery and, in turn, lead to disruption in reality-monitoring processes. This study helps to refine our understanding of the cognitive processes underlying the presence of both auditory and visual hallucinations in patients with schizophrenia.