OBJECTIVE: The study assessed the level of reintegration into the community of patients with schizophrenia in Oslo, Norway, a country with a well-developed social welfare system and low unemployment rates. METHODS: Eighty-one patients with a DSM-III-R diagnosis of schizophrenia treated in 1980 and in 1983 in a short-term ward of a psychiatric hospital were followed up after seven years. Seventy-four of 76 patients alive at follow-up agreed to participate. Social functioning was measured by the Strauss-Carpenter Level of Functioning Scale and the Social Adjustment Scale. RESULTS: At follow-up 78 percent of patients lived independently, 47 percent were socially isolated, and 94 percent were unemployed. Thirty-four percent had lost employment in the follow-up period. A poor outcome in terms of social functioning and community reintegration was associated with loss of employment. A good outcome was predicted by short periods of inpatient hospitalization, high levels of education, being married, male gender, and not having a late onset of psychosis. CONCLUSIONS: The level of homelessness among these patients with schizophrenia was encouragingly low, which may have been expected in a high-income welfare society. However, insufficient efforts were aimed at social and instrumental rehabilitation, and the level of unemployment was alarmingly high.