The effectiveness of cognitive rehabilitation in ameliorating the symptomatic, cognitive, and functional deficits associated with schizophrenia and schizoaffective disorders was assessed in this prospective study. Thirty-eight participants who met DSM-IV criteria were assigned to cognitive rehabilitation treatment or treatment as usual (TAU) groups, using the method of minimization to equalize groups on prognostic variables believed to affect outcome (i.e., duration and severity of illness, Clozapine). Participants were assessed at baseline, treatment end, and 3-month follow-up. Improvement across time was found for both groups in delayed visuospatial memory and visual information processing speed, and the participant's status on the prognostic variables was found to be related to level of performance on measures of delayed visuospatial memory, negative symptoms, and speech disturbance. However, the findings did not provide evidence that cognitive rehabilitation is associated with greater improvement than TAU. Nor did the findings indicate that prognosis interacted with treatment to produce differential treatment outcomes.