A new agenda for the practice and study of psychotherapy of schizophrenia should focus not on the longstanding debate as to whether psychotherapy is effective, but on how it may be effective for particular groups of patients, and on combining psychotherapy with other interventions over the course of illness. Empirical studies have failed to substantiate claims for broadly superior outcome when patients are treated with psychotherapy, and practitioners of psychotherapy may need to have a narrower focus and more modest expectations for change. Research efforts should work toward developing guidelines for selective use of psychotherapy that are consistent with our recognition that schizophrenic patients show heterogeneity in their etiology, presenting symptoms, and clinical course. Intrapsychic, experiential, and interpersonal aspects of schizophrenia that are most resistant to other treatment approaches may be sensitive to psychotherapeutic intervention, and a psychodynamic approach to therapy offers the most direct help with a disordered inner world to the person struggling with schizophrenia.