During the past two decades, the Child Psychiatry Branch at the National Institute of Mental Health has conducted a longitudinal study (including long-term prospective follow-up) of childhood-onset schizophrenia, a rare form of the disorder. Critical to this research has been accurate diagnosis. Outpatient screening has accurately diagnosed 55% of the 121 childhood-onset schizophrenia patients in the study to date. However, inpatient observation including drug-free observation has proven crucial to ruling out 96 children with alternative diagnoses who had been provisionally admitted for inpatient study. Standardized clinical ratings from outpatient screening only predicted 62% of these nonschizophrenia patients. Historically, medication-free observation was standard clinical care for difficult and unusual patients; this should be employed when possible in similar situations.