In this article, we review the literature on practice effects in schizophrenia, an underappreciated confound in interpreting cognitive improvement in clinical trials. We first examine claims regarding first- and second-generation antipsychotic medications as cognitive enhancers, and follow it with a discussion of recent studies demonstrating how practice or placebo effects may drive 'positive' findings. Thus, this review suggests that many previous findings can be reinterpreted in this light. Critically, we also make several suggestions about test construction, study design, and statistical analyses that the field might use to overcome this potential confound. Our suggestions may also have implications for drug discovery and regulatory approval of cognitive-enhancing adjunctive agents, in terms of study design and/or test psychometric characteristics, including the development of tests that are relatively insensitive to practice-related changes. Such advances might be important for improving the methodology involved in the assessment of cognitive change in treatment studies.