The long-term goal of the proposed project is to improve the treatment of alcohol abuse and dependence in patients with schizophrenia and schizoaffective disorder. Alcohol use disorders are common among patients with severe mental illness. It is estimated that there may be as many as 750,000 individuals in the United States with comorbid schizophrenia and alcohol disorders. Alcohol disorder comorbidity requires treatment because it is associated with adverse consequences such as increased rates of hospitalization. Yet, to date, there are no reports of controlled trials testing the efficacy of pharmacological treatments for alcohol abuse or dependence in this population. Naltrexone pharmacotherapy is an effective treatment for alcohol dependence, but it has not been systematically applied to the care of patients with schizophrenia. The specific aims of this study are: To test the efficacy of naltrexone in reducing alcohol use among individuals with schizophrenia and schizoaffective disorder who also have alcohol abuse or dependence. We will test hypothesis 1: Naltrexone will be more effective than placebo in reducing alcohol use. Our primary outcome measure will be the number of drinking days over the course of the treatment trial. To test naltrexone's efficacy in reducing psychiatric symptom severity and medical utilization by reducing alcohol use. We will test hypothesis 2: Patients responding to naltrexone by reducing alcohol use will also show reductions in severity of psychiatric symptoms and utilization of inpatient and emergency psychiatric services. To determine the relationship between a) changes in alcohol use, and b) psychiatric symptom severity and inpatient and emergency service utilization. We will test hypothesis 3: Severity of psychiatric symptoms and amount of service utilization will correlate positively with alcohol use. The proposed research will study a cohort of 150 subjects in a double-blind, randomized, placebo-controlled trial of naltrexone using three times per week directly observed administration of medication. The study will be 6 months in duration, consisting of a 12-week course of naltrexone or placebo plus 3 monthly follow-up interviews after discontinuation of medication. Voucher incentives contingent on attendance will be provided to all subjects to ensure attendance for medication administration. Weekly motivational enhancement counseling sessions will also be provided to all subjects. Study outcomes will consist of self-report and biological measures of alcohol use as well as measures of psychiatric symptom severity and medical service utilization.