This study evaluated the longitudinal course of neuropsychological deficits in a group of patients with new or recent onset schizophrenia. Thirty-five inpatients with DSM-III-R diagnoses of schizophrenia were administered a comprehensive battery of neuropsychological tests during their index hospitalization, and either 1 or 2 years after intake. Cognitive function remained stable in most domains, including motor speed, verbal and nonverbal memory, and verbal learning. Significant improvement in neuropsychological performance was observed on a task of complex attention (Trails B) and a set response shifting task (Stroop). These improvements were correlated with changes in clinical symptoms, but not with changes in medication dose. These findings suggest that most of the neuropsychological functioning in schizophrenia is stable over the first few years of the illness. Moreover, those neuropsychological deficits that remain unchanging appear to be independent of significant change in clinical symptoms, suggesting they may be a trait of the illness. However, a small subset of functions such as complex attention and response inhibition appear to fluctuate with time, and in particular, with clinical symptomatology, and may be considered 'state' dependent.