Following baseline assessment, 166 patients in medication maintenance at a community mental health center who were experiencing both persistent positive symptoms of schizophrenia and impairments in functioning were randomized to 1 of 4 treatments for 9 months: (1) Cognitive Behavior Therapy for psychosis (CBTp)—a therapy designed to identify and alter reasoning and appraisal biases that contribute to the formation and maintenance of positive symptoms, (2) Cognitive Adaptation Training (CAT)—a treatment using environmental supports including signs, alarms, checklists and the organization of belongings established at weekly home visits to compensate for impairments in cognitive functioning and improve everyday functional outcomes, (3) Multi-modal Cognitive treatment—a combination of CBTp and CAT, and (4) Treatment as Usual. Data on symptoms and functional outcomes were obtained every 3 months. A mixed effects regression model with repeated measures using a 2 (CAT/no CAT) × 2 (CBT/no CBT) design indicated that functioning as measured by the Multnomah Community Ability Scale improved more in groups receiving CAT than other treatment groups. Auditory hallucinations and associated distress improved slightly more in groups receiving CAT. In this study, CBTp did not improve outcomes. Combining CAT with CBTp did not improve outcomes more than CAT alone.