Background Neuropsychological (NP) performance is a consistent correlate of everyday functioning in schizophrenia, but it is unclear whether relationships between individual NP ability areas and domains of everyday functioning are general or specific. Assessments of real-world everyday functioning may be influenced by environmental and social factors (e.g., social security, disability status, opportunities and restrictions in living situations). This study examined the specificity of the relationships between different NP abilities and performance-based measures of social and living skills. Methods 181 ambulatory older (age>50) patients with schizophrenia were examined with NP tests measuring episodic and working memory, executive functioning, verbal fluency, and processing speed. All subjects performed tasks examining social (Social Skills Performance Assessment: SSPA) and everyday living (UCSD Performance Based Skills Assessment: UPSA) skills. Results Using canonical analysis, the NP variables were used to predict the functional capacity measures. The analysis found that 37% of the variance in the functional capacity and NP measures was shared, X 2 (54)=106.29, p <.001. Two canonical roots described the cognitive variables and the roots were differentially associated with everyday living and social skills. The root loading on processing speed, episodic memory, and executive functions were associated with UPSA scores, while the root loading on working and episodic memory and verbal fluency were associated most strongly with social competence. Implications Social and everyday living skills deficits in patients with schizophrenia may reflect generally independent domains of functional outcome, linked through cognitive performance. The data suggest that somewhat different cognitive processes are associated with these two domains of functional capacity, although there appears to be some overlap, which may be due to the nature of the NP tests employed.