Several studies have demonstrated the effective use of dehydroepiandrosterone (DHEA) in the management of mood, however studies of its use in psychosis remain limited. The aim of this study was to investigate for the first time efficacy of DHEA augmentation with standardized antipsychotic medication (olanzapine) and to explore effects of DHEA augmentation on side-effect profiles including weight gain, glucose tolerance, aggression, quality of life and neurocognitive function. Finally, we aimed to analyze any relationship between plasma levels and clinical response to DHEA administration. Forty patients with chronic schizophrenia stabilized on olanzapine were randomized in double-blind fashion to receive either DHEA (titrated up to 150mg) or placebo augmentation for a period of 12-weeks. Blood samples were collected at baseline, mid-study and study completion. Results indicated improvement of negative symptoms (SANS scale) even when baseline scores were controlled as a covariate. Some improvement in Parkinsonism and akathisia compared to baseline was seen in patients receiving DHEA. No change in psychosis as reflected by the PANSS was noted. Patients receiving DHEA appeared to demonstrate relatively stable glucose levels compared to controls at the end of the study. An improvement in cognitive performance (most notably memory), which did not reach significance due to low sample number, was observed following DHEA administration. Results further suggest preliminary evidence of involvement of the neurosteroid system in schizophrenia pathophysiology, and confirm initial "cautious" findings identifying an agent capable of improving negative symptoms and certain features of extrapyramidal side effects.