Neuropsychological functioning is moderately to severely impaired in nearly all patients with schizophrenia. As cognitive function is highly independent of positive symptoms - the hallmark of treatment-resistant schizophrenia - the nature and severity of cognitive impairment in patients with the treatment-resistant form of schizophrenia is fairly similar to that in non-treatment-resistant patients. Cognition is a strong predictor of functional dimensions of outcome such as social, educational, and vocational achievement. Consequently, cognitive dysfunction is now recognized as an important treatment target. Atypical antipsychotic drugs have a modest beneficial effect on cognition in schizophrenia, for both treatment-resistant and non-treatment-resistant patients. The effort to develop novel treatments that improve cognition is focused on targeted pharmacologic treatments that augment the effects of antipsychotic agents. The possibility that such drugs will have differential effects on treatment-resistant and non-treatment-resistant patients must be considered. This review summarizes the breadth, consequences, and pharmacological treatment of neuropsychological impairment in schizophrenia. Particular emphasis is placed on findings that are relevant to treatment-resistant schizophrenia.