OBJECTIVE: To evaluate functioning and resource use of schizophrenic patients treated with antipsychotic agents. METHODS: One thousand eight hundred forty-seven schizophrenic out-patients who initiated or altered antipsychotic treatment were studied for one year. Four consultations were made at baseline, 3, 6 and 12 months intervals. Health care resource use for schizophrenia treatment was recorded as well as the Social Functioning Scale (SFS): Social Relations (SR), Interpersonal Communication (IC) and Independence (I). There were two cohorts: patients who started Olanzapine, (1091, 59.1%) and patients on other antipsychotics, (756, 40.9%, of which 187 were on Quetiapine, 471 on Risperidone and 98 on typical antipsychotics). RESULTS: Sixty four percent of subjects were male, mean age 38.9 (13) and 58.1% under 40. 20.3% were employed and 39.4% unemployed. First presentation for schizophrenia was made at approximately 28 (10) years, of which 28.7% had attempted suicide on one occasion. At baseline visit, 76.4% were on antipsychotics and, in the previous six months, had been hospitalised for schizophrenia related treatment for an average of 10.7 (23) days, attended a day-centre 9.7 (27) times and had seen a psychiatrist 10 (15) times. Both groups experienced improvements in Social Functioning: the Olanzapine group had increased scores of 10.2 (16.6), 11.6 (19.7), and 7.5 (18.6) in terms of SR, IC and I, while the other group observed increases of 7.1 (16.4), 7.5 (18.6), and 5.4 (17.5), respectively. No differences were detected between cohorts in terms of service use: 17.9% of patients attended a day-centre on average 8.7 times and 99.9% of patients saw a psychiatrist, an average of 9.7 visits per patient annually. There were slight differences (p <0.01) in the number of hospitalisations (11.2%: Olanzapine group and 14.8%: other antipsychotics) but no difference in duration of stay (2.7 days per annum). CONCLUSIONS: Functioning of schizophrenic patients improved in terms of social relations, interpersonal communication and independence.