Prepulse inhibition (PPI) is suggested to reflect a basic inhibitory mechanism which regulates sensory input to the brain, preventing sensory overload and cognitive fragmentation. However, studies directly investigating the relationship between PPI and cognition have produced inconsistent findings; this is likely to be due to the use of uninstructed PPI tasks, and limitations with the methods for measurement of PPI and startle. Therefore, the current study examined the relationship between cognitive performance and attentional modulation of PPI, using novel methods for the measurement of PPI. PPI was measured in 44 patients with schizophrenia and 32 healthy controls, across a range of startling stimulus intensities, under two attention set conditions. A range of neuropsychological tasks was also administered. Curves of best fit were fitted to the startle magnitudes, across the stimulus intensities, and a number of parameters were extracted from these curves, each of which reflects a different characteristic of the startle response. Correlations and quartile splits of the sample (highest versus lowest PPI) revealed that more PPI of response measures and less PPI of stimulus measures under the IGNORE condition was associated with superior performance in the colour-word subtest of the Stroop task. Further, more PPI of stimulus measures and less PPI of response measures under the ATTEND condition was associated with better performance on a memory task. These relationships appear to be mediated by common attentional processes active within both PPI and cognitive tasks, rather than by common underlying neurophysiological inhibitory processes.