Neurological soft signs (NSS) are nonspecific indicators of brain dysfunction that are found to be in excess and correlated with cognitive dysfunction and psychopathology in patients with schizophrenia. The aim of the study was to examine whether the severity of NSS determines the efficacy of atypical antipsychotics in schizophrenia. Forty-three patients with schizophrenia were assessed on psychopathology and cognitive domains of executive functioning, memory, attention, and psychomotor speed at baseline and 6 months after they had been switched from typical to atypical antipsychotics. NSS were examined at baseline. The high-NSS group showed more severe psychopathology and greater impaired cognitive function than the low-NSS group at baseline. Following treatment, there were improvements in cognitive functioning and psychopathology with the low-NSS group, which showed significant improvements on measures of verbal fluency, memory, and psychomotor speed and negative symptoms. The high-NSS group also showed improvements on most of these measures, but the improvement was less than that seen in the low-NSS group. The presence of high NSS in schizophrenia patients impedes the improvement in cognitive function with atypical antipsychotics treatment.