Clozapine was the first antipsychotic medication to be approved for the indication of treatment-refractory schizophrenia. This followed rigorous testing in patients who retrospectively and prospectively failed treatment trials of relatively high doses of conventional antipsychotics. In the past decade, other atypical antipsychotics have been approved, but they have not been designated specifically for patients with a history of prior poor treatment response. Better tolerated than clozapine, these new agents have been used with varying success in patients who would have otherwise received clozapine. Up until very recently there has not been a head-to-head controlled clinical trial comparing the two most commonly used atypical antipsychotics, risperidone and olanzapine, with clozapine in patients considered to have a suboptimal response to typical antipsychotics. This review summarizes the current advances made in the pharmacological management of these patients by examining recently published randomized controlled clinical trials that have measured psychopathology and cognition.