Most research establishing the relationship between cognition and functioning in schizophrenia has been conducted cross-sectionally, leaving unanswered the question of whether there is a predictive relationship between temporal change in cognition and temporal change in functioning. In the present study, we used longitudinal mixed models to examine the relationship between change in cognition and change in Quality of Life (QLS), as measured over three time-points spanning a 12-month period, for 151 schizophrenia outpatients participating in work therapy with or without cognitive remediation. Memory and executive function changes were significant predictors of improved QLS total. Whereas the relationship between memory and QLS total was in the expected direction, with improvements in memory associated with improvements in QLS, the relationship between executive function and QLS was negative, with QLS improvements associated with declines in executive function. Similar patterns were found for individual QLS domains. Finally, there were positive cross-sectional relationships between QLS and hours worked as well as gender (female gender associated with better QLS). Lag models supported these results. Differences between these findings and previous studies are discussed along with functional assessment issues and the potential moderators of the relationship between cognitive change and functioning.