Abstract: Functional recovery is an important treatment target in schizophrenia. Although medication is effective at reducing positive symptoms of the disorder, these improvements do not translate to improved functioning. In this study, schizophrenia outpatients (N = 54) received the psychosocial treatment Functional Adaptation Skills Training. Hierarchical regression analyses determined whether baseline neurocognitive, symptom, course of illness, and demographic variables predicted improvement in performance-based measures of functional competence and case manager–rated real-world behavior after the intervention. Consistent with previous research, neurocognition emerged as a predictor of improved competence and behavior. Symptoms played a minor role in predicting change; however, institutionalization history seemed to be an important rate limiter for functional recovery. Correlations among change scores were modest, with evidence for concomitant changes in competence and performance. The predictors of change after psychosocial treatment vary by the domain (e.g., adaptive and interpersonal) of functioning and the level of assessment (e.g., competence and performance).