Psychiatric rehabilitation refers to a treatment philosophy and to a set of assessment and treatment techniques designed to reduce disability and maximize environmental adaptation. The field of psychiatric rehabilitation of schizophrenia is now well developed, and successful interventions exist for teaching many essential community-living skills and for promoting maintenance and generalization of these gains. Recent developments include the creation of new skills-training interventions and cognitive rehabilitation techniques and improvements in the delivery of vocational and substance abuse treatments. As a field, psychiatric rehabilitation is continuing to develop in a manner that is responsive to perceived treatment needs, shortcomings of existing interventions, and developments in related fields (e.g., social psychology, neuroscience of schizophrenia). Some of these developments in theory and research point to areas of conceptual/theoretical weaknesses in existing treatments and assessment measures and suggest directions for further development. This article reviews the current status of a number of areas within the psychiatric rehabilitation of schizophrenia, highlighting future needs.