Cognitive deficits predict functioning in schizophrenia; however, little is known as to whether the association is present in other mental disorders. If specific cognitive deficits uniquely predict functional impairment in schizophrenia the association of select aspects of brain dysfunction with daily living would suggest an intervention target and perhaps a means by which to improve the functioning of schizophrenia patients. The relationship of cognition and functioning was investigated in schizophrenia (n =39), bipolar affective disorder (n =27), and nonpsychiatric control (n =38) participants to determine whether the associations varied across groups. We examined verbal memory, verbal learning, verbal fluency, vigilance, executive functioning, symptomatology, and generalized cognitive functioning for associations with social function. Correlational analyses revealed particular cognitive domains (e.g., verbal memory) to be associated with social functioning in schizophrenia, bipolar, and control subjects; however generalized cognitive function and symptomatology were also associated with social functioning in patients. Multiple regression analyses revealed that in schizophrenia poor verbal memory predicted worse social functioning even after the effects of generalized cognitive dysfunction were considered. Verbal memory indices failed to account for variance in social function in bipolar patients and control subjects after consideration of generalized cognitive function. Bipolar patients with worse planning and problem solving tended to have worse social functioning. Therefore, unlike schizophrenia patients who may fail to process verbally mediated material, bipolar patients' difficulty with logical approaches to problems in daily living may have the greatest impact on their community function.