Background Individuals with schizophrenia show deficits in cognitive functioning, as evidenced by deficits on neurocognitive tasks such as the Wisconsin Card Sorting Task (WCST). Studies of risk/reward decision-making in individuals with schizophrenia have yielded mixed results, and few studies have examined systematically the relationship between these domains and their relationship with clinical factors. Method Thirty-two smokers with schizophrenia, ten non-smokers with schizophrenia, nine non-psychiatric non-smokers and ten non-psychiatric smokers were administered computerized versions of the Iowa Gambling Task (IGT) and the WCST. Smokers were allowed to smoke ad libitum during designated breaks in order to prevent deprivation. Results Subjects with schizophrenia performed significantly worse than non-psychiatric controls on both the IGT and the WCST, and performance on these tasks was significantly correlated across subject groups. Among women with schizophrenia, smokers performed significantly better than non-smokers on the IGT. Conclusions Individuals with schizophrenia perform worse than controls on the IGT, suggesting impairments in risk/reward decision-making. Correlations between IGT and WCST performance suggest a shared element underlying task performance, such as a deficit in set-shifting or perseverance. Further research is needed to establish the relationship between cigarette smoking and IGT performance in schizophrenia.