The behavior that accompanies schizophrenia and related disorders interferes with professional and social activities. As a result, schizophrenia is one of the most costly psychiatric illnesses. Direct medical costs associated with schizophrenia were estimated from the Italian National Health Service perspective. This was a multicenter observational 1-year study conducted in 14 Italian community mental health centers (CMHCs). Eligible patients were those with a diagnosis of schizophrenia or schizoaffective or schizophreniform disorder who had been followed by the CMHCs for at least 2 years at study entry. Exactly 643 patients were enrolled in the study. The mean direct cost per year was 6,964 (27,025 for schizophrenia and 6,587 for patients with related psychotic disorders) (1998 exchange rate U.S.$1 = 1.121). The present study provides further estimates of the cost of schizophrenia treatment in Italian mental health services and highlights the variability in the single cost components across clinically defined subgroups of patients.