This article addresses issues affecting the progress of research on the psychological treatment of schizophrenia, including the need for comprehensive and long-term treatment, individual differences in treatment needs, the role of the patient in the treatment process, and the limitations imposed by information-processing deficits. Despite these issues, research on psychological treatment has made significant progress over the last decade. Controlled trials of social skills training, the most widely studied intervention for individual patients, suggest some beneficial effects, although the results are mixed. Recent interest in cognitive rehabilitation or teaching patients how to manage cognitive deficits holds promise, but the feasibility and efficacy of these approaches remain to be demonstrated. Family intervention programs aimed at educating relatives and helping them cope more effectively with the patient's illness have shown positive effects on the course of schizophrenia, although treatment gains appear to be modest and of uncertain durability. The results of controlled research on psychological treatment suggest that intervention may improve the outcome of schizophrenia, but that many patients may require long-term treatment due to the chronic nature of the illness. Future avenues of research include the timing of psychological treatment, the integration of individual and family approaches, the interaction between novel antipsychotic medications and response to psychological treatment, and the development of new interventions for patients who abuse drugs and alcohol or who are nonresponsive to existing treatments.