Cognitive impairment is present in the majority of schizophrenic patients, even at the onset of psychosis. It is a relatively stable characteristic in most patients, usually with little progression over the course of illness, but sometimes progresses to severe dementia. The results of studies of the effects of typical neuroleptic drugs on cognitive functioning in schizophrenia are conflicting. Clozapine, which has superior antipsychotic effects compared to typical neuroleptic drugs, has been reported to improve executive function, verbal fluency, attention, and recall memory in two of three studies. Cognitive measures predict work function and overall outcome on clozapine as assessed by the Global Assessment Scale and Quality-of-Life Scale in neuroleptic--resistant schizophrenia. Improvement in cognitive function by clozapine may be a major reason for expanding its currently limited utilization.