This study investigated demographic, clinical and neurocognitive factors predicting drop-out from an intensive, community outpatient psychosocial rehabilitation program for people with schizophrenia or schizoaffective disorder. One-hundred and twenty-seven outpatients with DSM-IV schizophrenia or schizoaffective disorder participated. Demographic variables of age, sex, education and race/ethnicity were recorded and formal symptom measures and a neurocognitive assessment consisting of measures of crystallized verbal ability, sustained visual vigilance, verbal learning, verbal fluency and problem-solving were administered at study entry. Thirty-seven percent of the sample dropped-out of the program. In a final multivariate model, younger age, and lower verbal fluency scores in clients with a history of a high number of hospitalizations predicted a greater likelihood of drop-out. The implications of these findings are discussed.