Several studies of normobaric hyperoxia in neurological conditions have found positive results. The impaired energy metabolism due to mitochondrial dysfunction and frontal lobe hypofunction in schizophrenia might be improved by increasing O2 supply to the brain. Normobaric hyperoxia may be a potential treatment for schizophrenia. Participants in this study, outpatients with chronic schizophrenia and inhabitants of community-based psychiatric institutions (hostels), underwent baseline psychiatric/cognitive assessment and were randomly assigned to either a treatment intervention of oxygen-enriched air inhalation (normobaric hyperoxia of 40% fraction of inspired oxygen) or regular air inhalation (21% fraction of inspired oxygen), through a nasal tube, for 4 weeks. Patients were given the air/oxygen inhalations during the night (mainly while sleeping) for at least 7 hours a night. After completing 4 weeks of treatment, patients were switched (crossed over) to the other treatment intervention. Fifteen patients completed the entire study. Five additional patients completed phase A only. There was significant improvement in total Positive and Negative Symptoms Scale score of patients who received oxygen compared with the control group. There were positive effects of oxygen on memory and attention in neuropsychological performance tests. The effect size is small despite the statistical significance, but the patient group was extremely chronic and severely impaired. These results are a proof of concept, and normobaric hyperoxia should be studied in patients with milder forms of the illness and earlier in the course of illness.