Background The functional outcome of schizophrenia is affected by multiple factors such as cognitive function and clinical symptoms. The complex relationship among cognitive function (both neuro- and social-cognitions), clinical symptoms, and functional outcome remains unclear. The current study employed structural equation modeling (SEM) to examine whether clinical symptoms mediate the relationship between cognitive function and functional outcome in a large cohort of patients with schizophrenia. Method Three hundred and two Han-Chinese patients with chronically stable schizophrenia received evaluation of cognitive function (using the Measurement and Treatment Research to Improve Cognition in Schizophrenia [MATRICS] Consensus Cognitive Battery, including 7 domains covering neurocognition and social cognition), clinical symptoms (including positive, negative and depressive symptoms), and functional outcome as assessed by Global Assessment of Functioning Scale and Quality of Life Scale. Results SEM identified clinical symptoms as a mediator between cognitive function (including all 7 domains of MATRICS) and functional outcome in schizophrenia. The relationship between cognitive function and functional outcome was significant in the basic model. In the mediation model, the link between cognitive function and functional outcome was mediated by clinical symptoms, mainly negative symptoms. Conclusion This study suggests that clinical symptoms, mainly negative symptoms, mediate the influence of neurocognition and social cognition on functional outcome of schizophrenia. Future studies should explore the impact on other functional outcomes in different ethnicities and various illness phases.