A novel treatment for persons who have both schizophrenia and substance abuse was evaluated by incorporating cognitive-behavioral drug relapse prevention strategies into a skills training method originally developed to teach social and independent living skills to patients with schizophrenia. Thirty-four of 56 patients completed treatment and a three-month follow-up assessment. Participants learned substance abuse management skills and reported that they found the treatment relevant, useful, and satisfying, and their drug use decreased. Improvements were noted in medication adherence, psychiatric symptoms, and quality of life. This manual-driven therapy may play an important role in the treatment of substance abuse among patients with schizophrenia.