This study was designed to assess the relative prognostic importance of patient factors, therapist characteristics, and treatment mode. The sample was one hundred schizophrenic outpatients referred to a community mental health center following psychiatric hospitalization. Patients were randomly assigned to either group or individual psychotherapy. Criteria were rehospitalization and two clinician ratings—adjustment and social effectiveness—at a two-year follow-up. The best predictor of rehospitalization was the number of previous hospitalizations. The best predictor of adjustment status at two years was pretreatment adjustment level. Also, patients with good prognostic indices made relatively large gains. Predictors of outcome for group-treated patients did not differ from those for individually treated patients. Controlling for initial status, treatment mode was almost as good a predictor of adjustment gains as were other patient factors.