Recently, research has linked deficits in neurocognition, which emerge early in schizophrenia, with psychosocial impairments. However, it is uncertain how these deficits lead to sustained dysfunction. In this review, we explore how neurocognitive deficits could disrupt function at three levels: learning, coping preference, and self-concept. We offer a model in which neurocognitive impairment may directly limit skills acquisition and the development of a rich personal narrative. We suggest that both limited skills acquisition and an impoverished narrative may subsequently feed into a habitual style of avoidant coping, leading to a cycle of sustained dysfunction. Implications for cognitive, rehabilitation, and psychotherapeutic interventions are discussed.