Approximately 327 patients with schizophrenia or schizoaffective disorder were randomly assigned to one of two treatment groups. One treatment group was prescribed olanzapine with daily dosage ranging from 5 mg/day to 20 mg/day. The other treatment group was prescribed haloperidol with daily dosage also ranging from 5 mg/day to 20 mg/day. A semi-structured psychosocial case management treatment program is provided for all study patients. Patients were recruited from 18 VA medical centers over a 24-month period and were followed for one year. 18 patients were enrolled at one site that had its research program terminated during the study. Because of questions regarding the circumstances that led to the termination, these 18 patients will not be included in study analyses. The major objective of the study is to determine if olanzapine is more cost effective than haloperidol. Secondary objectives include evaluation of clinical efficacy, safety, social and vocational functioning, family burden, compliance and satisfaction for olanzapine relative to haloperidol.