Paliperidone palmitate (PP) is a recently introduced long-acting atypical, or second-generation, antipsychotic. Published data on PP are currently limited to controlled trials and case reports. In this observational study, we followed up 200 consecutive patients prescribed PP in normal practice. After 1 year, 65% of patients were still receiving PP. The number of admissions to hospital in the year following PP initiation was 0.49/patient compared with 0.69/patient/year, 3 years before initiation (P=0.0001). The mean number of bed days fell from 38.78 to 23.09/patient/year over the corresponding period (P=0.0001). The median number of bed days 3 years before PP initiation was 21.50/year and in the year following PP initiation, it was 0. Outcomes were numerically but not statistically better in those continuing PP than in those who ceased PP within a year of initiation. PP was effective and well-tolerated and, given its positive effect on hospital bed days, broadly cost-effective.