Therapeutic advances over the last four decades have enabled most persons with schizophrenia to live in the community. Nevertheless, the majority will continue to experience various symptoms and to have social and cognitive disabilities. With the development of new medications and psychosocial interventions, outpatient status can no longer be viewed as a satisfactory final outcome. This article presents the current state of schizophrenia therapeutics in a variety of clinically relevant situations: first-episode psychosis, treatment-resistant psychosis, chronic, relapsing psychosis, continuous poor functioning, and chronic psychosis not responsive to pharmacotherapy. The first-line atypical antipsychotics should generally be used, mainly because of their comparatively benign side-effect profiles, and they should be given as early as possible in the illness. The clinician should not be quick to accept persistent psychosis; the second-line atypical clozapine should be tried early in the course of the disease in patients showing treatment resistance. For patients residing with their families, educational and supportive family interventions have an important effect on relapse prevention; for those who live on their own and suffer frequent relapses, Assertive Community Treatment may be helpful. Patients with psychosis that is not responsive to pharmacotherapy may benefit from specific modalities of cognitive-behavioral therapy currently being developed, while persons with persistent negative symptoms and limited social competence may find social-skills training useful. In addition, new programs of supported employment may enable some patients to maintain competitive employment.