To assess the efficacy of quetiapine, a recently introduced second generation antipsychotic medication, in reducing cognitive impairment in patients with schizophrenia. Prospective, randomized, double-blind clinical trial. 25 patients who met the Diagnostic and Statistical Manual of Mental Disorders, fourth edition, (DSM-IV) criteria for schizophrenia were recruited from 3 Canadian hospitals. After a 48-hour washout period, 25 patients with schizophrenia were randomly assigned to double-blind treatment with quetiapine or haloperidol for 6 months and evaluated with rating scales for psychotic symptoms, mood and extrapyramidal side effects, as well as standardized neuropsychological measures sensitive to 6 cognitive domains: fine motor skill, attention span, verbal reasoning and fluency, visuospatial construction and fluency, executive skills and visuomotor tracking, and immediate recall of verbal and nonverbal materials. The measures were repeated 8 weeks and 6 months after treatment was initiated. Quetiapine improved psychosis and mood without inducing extrapyramidal symptoms. Quetiapine also had beneficial effects on cognitive skills, particularly verbal reasoning and fluency skills and immediate recall, with additional improvements on executive skills and visuomotor tracking and on the average of the 6 cognitive domains with sustained treatment. Patients taking haloperidol showed improvements in general clinical status, but no specific improvements on the positive syndrome, the negative syndrome, depression ratings or cognitive skills. These preliminary results support the potential value of quetiapine for improving cognitive impairment in patients with schizophrenia and emphasize the importance of further research with this promising atypical antipsychotic.