The association of antipsychotic medication with abnormal brain morphometry in schizophrenia remains uncertain. This study investigated subcortical morphometric changes 6 months after switching treatment to clozapine in patients with treatment-resistant schizophrenia compared with healthy volunteers, and the relationships between longitudinal volume changes and clinical variables. In total, 1.5T MRI images were acquired at baseline before commencing clozapine and again after 6 months of treatment for 33 patients with treatment-resistant schizophrenia and 31 controls, and processed using the longitudinal pipeline of Freesurfer v.5.3.0. Two-way repeated MANCOVA was used to assess group differences in subcortical volumes over time and partial correlations to determine association with clinical variables. Whereas no significant subcortical volume differences were found between patients and controls at baseline (F(8,52) = 1.79; p = 0.101), there was a significant interaction between time, group and structure (F(7,143) = 52.54; p < 0.001). Corrected post-hoc analyses demonstrated that patients had significant enlargement of lateral ventricles (F(1,59) = 48.89; p < 0.001) and reduction of thalamus (F(1,59) = 34.85; p < 0.001), caudate (F(1,59) = 59.35; p < 0.001), putamen (F(1,59) = 87.20; p < 0.001) and hippocampus (F(1,59) = 14.49; p < 0.001) volumes. Thalamus and putamen volume reduction was associated with improvement in PANSS (r = 0.42; p = 0.021, r = 0.39; p = 0.033), SANS (r = 0.36; p = 0.049, r = 0.40; p = 0.027) and GAF (r = -0.39; p = 0.038, r = -0.42; p = 0.024) scores. Reduced thalamic volume over time was associated with increased serum clozapine level at follow-up (r = -0.44; p = 0.010). Patients with treatment-resistant schizophrenia display progressive subcortical volume deficits after switching to clozapine despite experiencing symptomatic improvement. Thalamo-striatal progressive volumetric deficit associated with symptomatic improvement after clozapine exposure may reflect an adaptive response related to improved outcome rather than a harmful process.