Atypical antipsychotics generally have milder side-effects than conventional antipsychotics, but also differ among themselves in this respect. This study aimed to compare the impact of different side-effect profiles of individual atypical antipsychotics on non-compliance, relapse and cost in schizophrenia. A state-transition model was built using literature data supplemented by expert opinion. The model found that quetiapine and ziprasidone were similar in estimated non-compliance and relapse rates. Olanzapine and risperidone had higher estimated non-compliance and relapse rates, and incremental, 1-year, per-patient direct costs, using US-based cost data, of approximately $530 (95% confidence interval [CI] approximately $275, $800), and approximately $485 (95% CI approximately $235, $800), respectively, compared with quetiapine. Incremental costs attributable to different side-effect profiles were highly significant. This study shows that differing side-effect profiles of the newer antipsychotic agents are likely to lead to different compliance rates, and consequent variation in relapse rates. The cost implications of these heterogenous clinical outcomes are substantial.