The aim of the study was to compare psychotic and nonpsychotic bipolar patients on demographic and outcome measures. Sixty two patients with bipolar disorder were divided into groups on the basis of psychosis during an index episode of mania. Groups were compared on demographic, clinical and outcome measures. Psychotic patients were more symptomatic during the index episode, but they did not differ from nonpsychotic patients on ratings of function and well being when euthymic. Psychosis occurring within the context of an exacerbation of mania does not seem to predict a poorer outcome when patients return to the euthymic state. A limitation of the present study is that it involves short-term outcome, but the data can be used to inform patients and family about the possibility of full recovery even in the psychotic form of mania.