OBJECTIVES: This study examined whether remission of psychotic symptoms is associated with favorable long-term functional and health-related quality of life (HRQOL) outcomes in the treatment of schizophrenia patients in usual care. METHODS: We used data from the United States Schizophrenia Care and Assessment Program (SCAP), a 3-year observational study of schizophrenia, in which participants were assessed at enrollment and 12-month intervals. Remission of psychotic symptoms was defined using the Remission in Schizophrenia Working Group expert consensus criteria. Functional and HRQOL outcomes were assessed with validated measures. Four patient groups were compared on long-term outcomes: continuously remitted patients (R?R, N = 229); continuously non-remitted patients (NR?NR, N = 1110); patients who changed from non-remitted to remitted and stayed remitted (NR?R, N = 234); and patients who changed from remitted to non-remitted and stayed non-remitted (R?NR, N = 202). Analysis employed Generalized Estimating Equation (GEE) and mixed models with repeated-measures. RESULTS: The R?R group had significantly better outcomes than the NR?NR and R?NR groups on measures of productivity and occupational functioning, social activity, daily activity, Global Assessment of Functioning (GAF), mental health, quality of life, and life satisfaction. The NR?R group did not significantly differ from the R?R group on most measures, but had significantly poorer quality of life, daily activity, GAF, and occupational functioning. CONCLUSIONS: In this large prospective naturalistic study, remission of psychotic symptoms was associated with a broad range of favorable long-term functional and HRQOL outcomes. Findings highlight the importance of achieving and maintaining symptomatic remission in the long-term treatment of schizophrenia patients in usual practice settings.