X-ray spectral timing analysis is presented of XMM-Newton observations of the narrow-line Seyfert 1 galaxy I Zwicky 1 taken in 2015 January. After exploring the effect of background flaring on timing analyses, X-ray time lags between the reflection-dominated 0.3-1.0 keV energy and continuum-dominated 1.0-4.0 keV band are measured, indicative of reverberation off the inner accretion disc. The reverberation lag time is seen to vary as a step function in frequency; across lower frequency components of the variability, 3 × 10-4-1.2 × 10-3 Hz a lag of 160 s is measured, but the lag shortens to (59 ± 4) s above 1.2 × 10-3 Hz. The lag-energy spectrum reveals differing profiles between these ranges with a change in the dip showing the earliest arriving photons. The low-frequency signal indicates reverberation of X-rays emitted from a corona extended at low height over the disc, while at high frequencies, variability is generated in a collimated core of the corona through which luminosity fluctuations propagate upwards. Principal component analysis of the variability supports this interpretation, showing uncorrelated variation in the spectral slope of two power-law continuum components. The distinct evolution of the two components of the corona is seen as a flare passes inwards from the extended to the collimated portion. An increase in variability in the extended corona was found preceding the initial increase in X-ray flux. Variability from the extended corona was seen to die away as the flare passed into the collimated core leading to a second sharper increase in the X-ray count rate.
