Significant advances have been made in the psychosocial treatment of schizophrenia and other severe mental illnesses. Research provides the strongest support for six different interventions: the assertive community treatment model of case management; the supported employment approach to vocational rehabilitation; family intervention; skills training and illness self-management; cognitive-behavioral therapy for psychotic symptoms; and integrated mental health and substance misuse treatment for ‘dually diagnosed’ patients. Recent research, including randomized clinical trials, provides further support for the effects of these interventions and points to new areas of inquiry, including fidelity to treatment and differential treatment prediction.