Against the background of the growing evidence that the patient's functioning significantly influences the course and outcome of schizophrenia, the aims of this analysis were to examine what proportion of patients achieve functional outcome criteria after 1 year, and to identify clinical and sociodemographic predictive factors for functional remission. Patients with the diagnosis of schizophrenia who were treated as inpatients at the beginning of the study were examined within a naturalistic follow-up trial. The present study reports on the time frame from admission to discharge of an inpatient treatment period and the 1-year follow-up assessment. The Global Assessment of Functioning (GAF) Scale and Social and Occupational Functioning Assessment Scale (SOFAS) were evaluated with respect to functional outcome, whereas Positive and Negative Syndrome Scale (PANSS) scores were rated as psychopathological outcome measures. Functional remission thresholds were defined according to a GAF score of ≥61 points and a SOFAS score ≥61 points. Symptomatic remission criteria were applied according to the remission criteria of the Schizophrenia Working Group. The Strauss–Carpenter Prognostic Scale (SCPS), the Phillips Premorbid Adjustment Scale, medical history, sociodemographic and psychopathologic parameters were evaluated in order to find valuable predictors for functional remission. One year after discharge from inpatient treatment, 211 out of 474 patients were available for analysis according to both rating scales used to assess functional remission (GAF and SOFAS). Forty-seven percent of patients fulfilled criteria for functional remission (GAF and SOFAS) at discharge and 51% of patients at the 1-year follow-up visit. With regard to symptomatic remission criteria, the corresponding remitter rates were 61% of patients at discharge and 54% at the 1-year follow-up visit. Forty-two percent of patients fulfilled both remission criteria at discharge and 37% at the 1-year follow-up visit. A significant association was found between functional and symptomatic remission at discharge and at the 1-year follow-up visit. The strongest predictors for functional remission at the 1-year follow-up visit were: a higher SCPS total score at admission, a lower number of previous hospitalizations, a status of employment, lower scores in all PANSS subscales at discharge, a better premorbid social adjustment, the occurrence of a first psychotic episode, a younger age, a lower PANSS negative subscore at admission, a status of being an early responder, a shorter duration of inpatient treatment, a later age of onset, and female gender.