Summary Aims:  The aim of the present analysis was to evaluate the cost‐effectiveness of alternative treatments for outpatients with chronic schizophrenia from the healthcare payer's perspective. Methods:  Decision analysis was used to evaluate the cost‐effectiveness of the following antipsychotic drugs: amisulpride, aripiprazole, haloperidol (oral formulation), haloperidol (depot formulation), olanzapine, quetiapine, risperidone (oral formulation), risperidone (depot formulation) and ziprazidone. Clinical and economic outcomes were modelled over 1‐year time horizon. Effectiveness was measured as a percentage of patients in remission. Clinical parameters used in the model included compliance rates, rehospitalisation rates for compliant and non‐compliant patients, duration and frequency of hospitalisation, and adverse event rates. One‐way sensitivity analysis was performed to test the robustness of the model. Results:  The most effective treatment was treatment with olanzapine where 64.1% of patients remained in remission. The least effective treatment was treatment with quetiapine where 32.7% of patients remained in remission. Overall costs ranged from 3726.78€ for haloperidol to 8157.03€ for risperidone in depot formulation. Inpatient costs represented the major part of costs for most of antipsychotic drugs. Typical antipsychotic drugs had substantially smaller outpatient costs (6.5%) compared with atypical antipsychotics (37.9%). In the base case scenario the non‐dominated treatment strategies were haloperidol, haloperidol decanoate and olanzapine. Additionally, risperidone can also be considered to be part of the efficient frontier based on the sensitivity analysis results. Conclusion:  Among second‐generation antipsychotics, which have a better safety profile than first‐generation antipsychotics, olanzapine and risperidone showed to be the most cost‐effective treatment strategies for outpatient treatment of chronic schizophrenia.