Cognitive dysfunction may underlie some of the psychopathology of schizophrenia as well as contribute to impaired social and vocational function in this disorder. Chronic treatment with typical neuroleptics has been reported to produce only minimal improvement in and may impair cognitive function in schizophrenia. We have studied the effect of clozapine, an atypical antipsychotic drug, on cognitive function in 36 patients with treatment-resistant schizophrenia. In addition, patients with non-treatment-resistant schizophrenia were randomly assigned to clozapine (N = 24) or typical neuroleptics (N = 23). Cognitive function in the treatment-resistant schizophrenia group was studied after 6 weeks and 6 months of treatment, while the non-treatment-resistant patients were also studied at 12 months of treatment. Clozapine treatment improved several domains of cognitive function, especially attention and verbal fluency in both treatment-resistant schizophrenia and non-treatment-resistant schizophrenia. On the other hand, typical neuroleptic treatment produced minimal improvement in cognitive function. The effect of clozapine on some tests of attention and verbal fluency was significantly greater than that of typical neuroleptic treatment in non-treatment-resistant schizophrenia. These data suggest that clozapine treatment was superior to typical neuroleptics in improving cognitive function in schizophrenia. The possibility that this is related to normalization of dopaminergic function by clozapine is discussed.