markov models were used to examine patterns of substance use and globa
l functioning in a sample of 100 schizophrenic outpatients over an 18
month period. Patterns of changes in substance use and functional stat
us were stable across the evaluation period. Persons remaining in any
substance use or functional state for two evaluation periods were high
ly likely to continue in the same state. Tests of two common causal hy
potheses about relationships between substance use and functional stat
us yielded partial support for the hypothesis that substance use leads
to functional impairment, but did not support the hypothesis that fun
ctional impairment leads to substance use. Furthermore, there was no e
vidence of any increase in overall substance use or of substance use l
eading to treatment dropout. These analyses illustrate a promising app
roach to key questions about substance sue in schizophrenia.