This longitudinal investigation was designed to determine the association between the positive symptoms of psychosis and instrumental work functioning among patients with schizophrenia in comparison to patients with affective disorders. 173 participants were assessed prospectively for the presence of psychosis and concurrent work adjustment using a series of standardized measures at four consecutive follow-ups over a 10 yr period. The data demonstrate a significant relationship between psychosis and increased impairment in work functioning across diagnostic groups for three of the four follow-up periods (p<0.01), with this relationship being most consistent for the schizophrenia patients throughout the course of their disorder (p<0.01). The more severely psychotic patients, regardless of diagnosis, are least likely to be working effectively; however, the debilitating effect of psychosis on work adjustment is most evident for schizophrenia patients.