Computerized targeted cognitive training (TCT) of auditory processing has been shown to improve verbal learning in several clinical trials of schizophrenia outpatients. Less is known, however, about the effectiveness of this promising intervention in more chronic, treatment-refractory patients who are treated in non-academic settings. This study aimed to determine whether TCT improves auditory processing, verbal learning, and clinical symptoms in SZ patients mandated to receive care at a locked residential rehabilitation center. Secondarily, potential factors that moderate TCT's effectiveness including age, symptom severity, antipsychotic medication load, and duration of illness were examined. Schizophrenia patients were randomized to treatment as usual (TAU; n = 22) or TAU augmented with TCT (TAU + TCT; n = 24). Outcomes included a measure of auditory perception (Word-In-Noise test, WIN), verbal learning domain scores from the MATRICS Consensus Cognitive Battery (MCCB), and clinical symptoms (Scale for the Assessment of Positive Symptoms, SAPS; Scale for the Assessment of Negative Symptoms, SANS). TCT produced significant improvements in auditory perception (d = 0.67) and verbal learning (d = 0.65); exploratory analyses revealed a statistically significant reduction in auditory hallucinations (d = −0.64). TCT's effects were only weakly, and mostly non-significantly, moderated by age, clinical symptoms, medication, and illness duration. These findings indicate that even highly symptomatic, functionally disabled patients with chronic illness benefit from this emerging treatment. Ongoing studies will examine the predictive utility of neurophysiological biomarkers and other characteristics assessed at baseline.