Functional psychiatric disorders are associated with a variety of cognitive deficits and, in some instances, severe cognitive impairment. This paper reviews the cognitive profile of patients with schizophrenia, depression, bipolar and anxiety disorders, as well as the longitudinal course and clinical outcome of the cognitive impairment associated with these conditions. The paper also discusses some of the mechanisms that may contribute to the expression of the cognitive deficits in these disorders and their potential relationship with common causes of dementia.