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Objective: This study examined the relative effects of the second-generation antipsychotic drugs and an older representative agent on psychosocial functioning in patients with chronic schizophrenia. Method: Consenting patients were enrolled in the NIMH Clinical Antipsychotic Trials of Intervention Effectiveness (CATIE) project. In phase 1, patients were randomly assigned to receive olanzapine, perphenazine, quetiapine, risperidone, or ziprasidone for up to 18 months. Clozapine was included for patients who chose this pathway after discontinuing phase 1 due to inefficacy; all other patients received another second-generation antipsychotic. Psychosocial functioning was assessed using the Quality of Life Scale. Results: Psychosocial functioning modestly improved for the one-third of phase 1 patients who reached the primary Quality of Life Scale analysis endpoint of 12 months (average effect size 0.19 SD units). Although for several of the drugs individually there were significant changes from baseline, overall there were no significant differences between the different agents. Results were similar at 6 and 18 months. There were no significant differences among the treatment groups in the amount of change in the Quality of Life Scale total score or subscale scores at 6, 12, or 18 months. Patients treated with clozapine in the efficacy pathway made comparable gains. Early treatment discontinuations, especially among patients most impaired at baseline, limited the ability to achieve more substantial functional gains. Conclusions: All antipsychotic treatment groups in all phases made modest improvements in psychosocial functioning. There were no differences among them after 6, 12, or 18 months. More substantial improvements would likely require more intensive adjunctive psychosocial rehabilitation interventions.