Background It has been suggested that the effect of cognitive remediation (CR) on functioning is mediated by the improvement in neurocognitive domains; especially executive function. However, the correlations are generally moderate and this has prompted the search for other mediators including negative symptoms (NS). Aims To investigate whether the effect of CR on functioning could be mediated by executive function and/or NS. Method In a previous study, 62 outpatients with schizophrenia were randomized to 32 group sessions of REPYFLEC CR or leisure activities. Functioning (Life Skills Profile; LSP), NS (PANSS) and executive function (Behavioral Assessment of the Dysexecutive Syndrome; BADS) were measured at baseline and post-therapy. To assess how the effect of REPYFLEC CR is expressed in functioning at post-treatment, an autoregressive mediation model was employed. Results There was a significant effect of the REPYFLEC CR compared with the control group in improving BADS total score and PANSS NS. There was also a significant association between NS and functioning while executive function was not significantly related to functioning. Finally, there was a significant intervention effect on functioning mediated by NS but not by executive function. Conclusion It is apparent that improving executive function does not lead directly to improved functional outcome and that NS might be closely linked to functioning in the context of our study.