Recent reports suggest that cognition is relatively preserved in some schizophrenia patients. However, little is known about the functional advantage these patients may demonstrate. The purpose of this study was to identify cognitively normal patients with a recently developed test battery and to determine the functional benefit of this normality relative to cognitively impaired patients. Average-range cognitive ability was defined by the Measurement and Treatment Research to Improve Cognition in Schizophrenia (MATRICS) Consensus Cognitive Battery (MCCB) composite score (T≥40) and applied to 100 patients with schizophrenia or schizoaffective disorder and to 81 non-psychiatric research participants. With group assignment adjusted for demographic variables, this procedure yielded 14 cognitively normal patients, 21 cognitively impaired patients, and 21 healthy adults with normal-range MCCB scores. Cognitively normal patients were indistinguishable from controls across all MCCB scales. Furthermore, their performance was superior to impaired patients on all scales except Social Cognition. Cognitively normal patients were also superior to impaired patients on a summary index of simulated life skills and functional competence. Nevertheless, both patient groups were equally disadvantaged relative to controls in independent community living. These findings suggest that normal-range cognition exists in schizophrenia, but fails to translate into enhanced community outcome. (JINS, 2014, 20, 1–7)