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OBJECTIVE: The premorbid intellectual, language, and behavioral functioning of patients hospitalized for schizophrenia, schizoaffective disorder, or nonpsychotic bipolar disorder was compared with that of healthy comparison subjects. METHOD: The Israeli Draft Board Registry, which contains measures of intellectual, language, and behavioral functioning for the unselected population of 16- to 17-year-olds, was merged with the National Psychiatric Hospitalization Case Registry, which contains diagnoses for all patients with psychiatric hospitalizations in Israel. The database was used to identify adolescents with no evidence of illness at their draft board assessment who were later hospitalized for nonpsychotic bipolar disorder (N=68), schizoaffective disorder (N=31), or schizophrenia (N=536). The premorbid functioning of these subjects was compared to that of nonhospitalized individuals matched for age, gender, and school attended at the time of the draft board assessment. The diagnostic groups of hospitalized subjects were also compared. RESULTS: Relative to the comparison subjects, subjects with schizophrenia showed significant premorbid deficits on all intellectual and behavioral measures and on measures of reading and reading comprehension. Subjects with schizophrenia performed significantly worse on these measures than those with a nonpsychotic bipolar disorder, who did not differ significantly from the comparison subjects on any measure. Subjects with schizoaffective disorder performed significantly worse than the comparison subjects only on the measure of nonverbal abstract reasoning and visual-spatial problem solving and performed significantly worse than subjects with nonpsychotic bipolar disorder on three of the four intellectual measures and on the reading and reading comprehension tests. CONCLUSIONS: The results support a nosologic distinction between nonpsychotic bipolar disease and schizophrenia in hospitalized patients.