Diffuse cognitive impairment characterizes patients with schizophrenia throughout the course of illness. The deficits persist despite clinical improvement associated with neuroleptic intervention and are related to outcome. It is unclear whether treatment with atypical agents is associated with improved cognition that relates to symptoms and outcome. Using a set of computerized neurocognitive measures, we evaluated whether the effects of olanzapine are greater than practice effects for specific neurocognitive domains that could provide targets for large-scale randomized studies. We enrolled 19 patients with schizophrenia before initiation of treatment with olanzapine and 16 of them were examined at 6 weeks and 6 months of follow-up. They were compared to 34 healthy participants who enrolled, 24 of whom were evaluated longitudinally. Improvement exceeding practice effects was observed in patients for abstraction and spatial memory and the latter correlated with clinical improvement in negative symptoms. These results suggest that some effects of olanzapine may impact both symptoms and cognitive performance.