Cognitive deficits are a fundamental feature of the psychopathology of schizophrenia. Yet the effect of treatment on this dimension of the illness has been unclear. Atypical antipsychotic medications have been reported to reduce the neurocognitive impairment associated with schizophrenia. However, studies of the pattern and degree of cognitive improvement with these compounds have been methodologically limited and have produced variable results, and few findings have been replicated. To clarify our understanding of the effects of atypical antipsychotic drugs on neurocognitive deficits in patients with schizophrenia, we have (1) reported on newly established standards for research design in studies of treatment effects on cognitive function in schizophrenia, (2) reviewed the literature on this topic and determined the extent to which 15 studies on the effect of atypical antipsychotics met these standards, (3) performed a meta-analysis of the 15 studies, which suggested general cognitive enhancement with atypical antipsychotics, and (4) described the pharmacological profile of these agents and considered the pharmacological basis for their effects on neurocognition. Finally, we suggest directions for the development of new therapeutic strategies.