The purpose of this investigation was to identify patients with cognitively impaired, cognitively normal and verbal memory-impaired subtypes of schizophrenia and to examine their clinical and functional validity as distinct forms of the disorder. These subtypes occurred in 73 of 154 patients meeting DSM-IV criteria for schizophrenia or schizoaffective disorder. A control group comprised of 18 healthy participants was also analyzed. Patient subtype and healthy groups were compared on adjunct cognitive as well as clinical and functional measures. The data support the cognitive validity and differentiation of these subtypes, with evidence that the generalized cognitive normality/impairment distinction associates with important aspects of symptom severity and functional outcome. Support for the clinical and functional validity of the verbal memory subtype was more equivocal. Overall, cognitively-based subtyping merits additional attention in efforts to organize the heterogeneity of the schizophrenia syndrome.