Performance-based tests of functional capacity are important to utilize in schizophrenia where global measures may underestimate community functioning in the context of impoverished environments and disincentives to return to work. The Test of Adaptive Behavior in Schizophrenia (TABS) is a performance-based measure of adaptive functioning designed to address limitations of other available measures including limited assessment of the ability to initiate and of the ability to identify problems that occur in the course of performing functional activities. The TABS and a variety of symptom, functional outcome, and cognitive measures were administered to 264 outpatients with schizophrenia/schizoaffective disorders at an initial assessment. At 3 months, 110 subjects received a follow-up assessment. Results indicated that the TABS had very good test-retest reliability (0.80) and inter-item consistency (0.84). Moreover, TABS scores were moderately to strongly correlated with other measures of functional outcome, negative symptoms and neuropsychological test scores (convergent validity). Measures of positive symptoms were not found to be related to TABS performance (discriminate validity). The data provide preliminary evidence for the reliability and validity of the TABS. Further studies of the psychometric properties of the TABS including those examining the sensitivity of the TABS to treatments with different pharmacological agents or psychosocial treatments are encouraged.