Olanzapine's structural similarities to clozapine and the results of premarketing clinical trials suggested potential usefulness in treating patients with treatment-refractory psychoses. Sixteen inpatients from the state hospital with severe, refractory schizophrenic or schizoaffective psychoses received olanzapine in a prospective, 12-week, open-label trial. The olanzapine dose was 10 mg/day for at least the first 6 weeks and never exceeded 20 mg/day. Mood stabilizers and other antipsychotic agents were discontinued before olanzapine was started. Patients frequently became more agitated within the first several weeks of initiating treatment, requiring the increased use of benzodiazepines and often leading to the discontinuation of olanzapine. Two patients improved significantly. Overall, significant clinical improvement was noted only for motor side effects. This study concluded that olanzapine was not effective in this heterogeneous group with chronic, severe, treatment-resistant psychosis when used in this manner. Further research is needed to explain the tendency toward agitation upon transition to olanzapine, which is reminiscent of reported risperidone complications. Clinicians should be alert for this complication and should minimize concomitant medication changes that might add to the risk of emergent agitation. (J Clin Psychopharmacol 1999;19:62-66)