Cognitive impairment has proven to be a major predictor of overall functional deficit in schizophrenia. Despite the significant impairments seen on the part of many patients with schizophrenia that implicate decline at some point in time, there have been no longitudinal studies of adaptive decline in patients with schizophrenia. In this study, 57 geriatric patients with chronic schizophrenia were examined with measures of clinical symptoms, cognitive impairments, and adaptive functioning while living in a chronic psychiatric hospital and followed up an average of two and a half years after their referral to nursing home care. Cognitive functioning and adaptive functioning both declined over the follow-up period, whereas there was no change in schizophrenic symptoms. Changes in cognitive functioning accounted for 25% of the variance in adaptive decline, whereas the baseline severity of cognitive impairment and schizophrenia symptoms were uncorrelated with adaptive decline. These data indicate that cognitive decline may predict deterioration in overall functional status and imply that treatment of cognitive impairment might have a beneficial effect on global functional status.