Cognitive impairment is common to both schizophrenia and alcoholism. Despite increasing recognition that people with both disorders represent a problematic client group, little is known about the possible additive effect of a dual diagnosis upon impaired cognitive function. This study investigates impairment of cognitive functioning in patients with schizophrenia, alcohol dependence, or a dual diagnosis of schizophrenia and alcohol use disorder. It was hypothesised that patients with dual diagnosis would show greater cognitive impairment than those with a single diagnosis. The Mini-Mental State Examination (MMSE) and standardised measures of psychiatric health and substance use were administered to 120 community psychiatric patients with a diagnosis of schizophrenia, alcohol dependence and both conditions (dual diagnosis). Higher rates of cognitive impairment were found among dual diagnosis patients compared to the schizophrenia or alcohol patients. This was shown in age-adjusted measures of global functioning, and on the tests of language, reading and writing, and visuospatial construction. Despite its common usage, global MMSE scores were insensitive to the cognitive impairments typically found in these clinical groups. Where the MMSE is used as a screening tool, it is recommended that scores are adjusted for the effects of age.