Cognitive functioning was compared in elderly patients with schizophrenia, elderly patients with probable Alzheimer's disease (AD), and matched healthy controls using a brief neuropsychological battery. Both schizophrenia and AD patients demonstrated marked impairment as compared to controls, with the profile of neuropsychological deficits in both disorders appearing remarkably similar. Only visual confrontation naming, verbal delayed recall, and rate of forgetting (i.e. savings score) significantly differentiated between the two patient groups, with AD patients showing poorer overall recall and more rapid forgetting of verbal information over delay. In addition, schizophrenia subjects showed a significantly greater deficit in visual confrontation naming than the AD group. The relationship of neuropsychological function and clinical symptoms of schizophrenia subjects was also examined. Results showed that word list learning, delayed recall, and rate of forgetting correlated most strongly with positive and negative symptoms. Recent neuropathological studies have indicated abnormalities in specific subfields of the hippocampal formation in schizophrenia that are also severely affected in AD. Though the specific histopathology of the two disorders differs, abnormalities in the common sites may underlie the common neuropsychological profile.