Two impurities found in both stressed and aged solid-state formulations of olanzapine have been identified as (Z)-1,3-dihydro-4-(4-methyl-1-piperazinyl)-2-(2-oxopropylidene)-2H-1,5-benzodiazepin-2-one (1) and (Z)-1-[1,2-dihydro-4-(4-methyl-1-piperazinyl)-2-thioxo-3H-1,5-benzodiazepin-3-ylidene]propan-2-one (2). The structures indicate that the two impurities are degradation products resulting from oxidation of the thiophene ring of olanzapine. The impurities were isolated by preparative HPLC from a thermally stressed formulation, and characterized by UV, IR, MS, and NMR. A synthetic preparation of compounds 1 and 2 by reaction of olanzapine with the singlet oxygen mimic 4-phenyl-1,2,4-triazoline-3,5-dione (PTAD) is presented. The structure of 2 was also determined by single-crystal X-ray diffraction analysis. A degradation pathway for the formation of 1 and 2 is proposed.