Patients with schizophrenia who adhere to physicians’ recommended use of medications are less likely to relapse than those who do not. Selfreport measures of adherence have been criticized on a number of grounds. Here we describe a performance-based measure of medication management, the Medication Management Ability Assessment (MMAA), which represents a modification of the Medication Management Test used in individuals with HIV infection. Subjects were 104 patients older than 45 years with diagnoses of schizophrenia or schizoaffective disorder, and 33 normal comparison subjects (NCs). Subjects participated in a role-play task (MMAA) that simulated a prescribed medication regimen similar in complexity to one that an older person is likely to be exposed to. The total number of pills over that prescribed, total number of pills under that prescribed, and total number of correct responses were calculated. Self-report and prescription record data on adherence as well as data on measures of psychopathology, global cognitive status, and other clinical measures were also gathered. MMAA role-plays required 15 minutes, and its 1-week test–retest reliability was excellent (intraclass correlation coefficient, 0.96). Patients committed significantly more errors in medication management compared with NCs. Significantly more patients were classified as being nonadherent (i.e., taking ±5%, 10%, 15%, or 20% of prescribed pills) compared with NCs. Patients with more severe cognitive deficits performed worse on the MMAA. MMAA performance was significantly related to prescription refill records, performance-based measures of everyday functioning, and self-reported quality of life. The MMAA is a useful instrument for observing ability to manage medications in patients with schizophrenia. The measure was related to severity of cognitive impairment, suggesting that adherence may improve with psychotropic and psychosocial interventions that target these deficits.