A growing body of literature has shown that neurocognitive deficits in schizophrenia account for 20–60% of the variance in measures of outcome, and in many studies are more closely related to outcome than symptoms [Green, M.F., Kern, R.S., Braff, D.L., Mintz, J., 2000. Neurocognitive deficits and functional outcome in schizophrenia: are we measuring the “right stuff”? Schizophr. Bull. 26(1), 119–136; Green, M.F., Kern, R.S., Heaton, R.K., 2004. Longitudinal studies of cognition and functional outcome in schizophrenia: implications for MATRICS. Schizophr. Res. 72(1), 41–51]. Most of these studies have been cross-sectional, few longitudinal studies have investigated the degree to which neurocognition and symptoms predict ability to benefit from outpatient rehabilitation, and no longitudinal studies use measures of everyday life skills that are performance-based. In the current study we investigated the relationship between five measures of neurocognitive function, crystallized verbal ability, visual sustained vigilance, verbal learning, problem-solving, and processing speed, and two measures of symptoms, total positive and negative symptoms, and change on a performance-based measure of everyday life skills after a year of outpatient rehabilitation. Rehabilitation consisted of both psychosocial and cognitive interventions. Forty-six patients with schizophrenia or schizoaffective disorder were studied. Results of a linear regression model revealed that verbal learning predicted a significant amount of the variance in change in performance-based measures of everyday life skills after outpatient rehabilitation, even when variance for all other variables in the model was accounted for. Measures of crystallized verbal ability, sustained visual vigilance, problem-solving, processing speed and symptoms were not linked to functional status change. These findings emphasize the importance of verbal learning for benefiting from psychosocial and cognitive rehabilitation interventions, and suggest the development of alternative rehabilitation strategies for those who do not benefit.