Given recent reports about the off-label use of modafinil as an adjuvant for the treatment of antipsychotic-associated sedation in schizophrenia patients and the recent interest in its putative cognitive-enhancing effects in this population, we present a systematic review of available data on trials of modafinil as an adjuvant in the treatment of cognitive deficits, negative symptoms, and antipsychotic-induced fatigue, and its tolerability. PubMed was searched for trials published in English up to January 2008 evaluating modafinil's effects on fatigue, negative symptoms, and cognition in schizophrenia with combinations of the following terms: schizophrenia, modafinil, cognition, negative symptoms, and fatigue. Six trials were identified: 2 randomized, prospective, double-blind placebo-controlled trials; 3 randomized, prospective, double-blind placebo-controlled crossover trials; and 1 open-label pilot study. Case series and case reports were excluded in the data analysis, except to identify potential adverse reactions to modafinil. Studies were examined for number of subjects, trial duration, design, dosing, and outcomes with respect to sedation, negative symptoms, cognitive function, and tolerability. One of 4 reviewed studies found a significant effect of modafinil as an alerting agent for antipsychotic-induced fatigue and sedation. Neither of 2 reviewed studies found modafinil to improve negative symptoms of schizophrenia. Three of 6 reviewed studies showed that modafinil may improve short-term memory, attention, and the ability to shift mental sets. Two neuroimaging studies identified functional correlates in areas associated with working memory functions. The main adverse effect was found to be a small risk of psychosis exacerbation, which was seen in 5 of 83 patients (6.0%) in the active treatment groups as compared to 2 of 70 patients (2.9%) in the placebo groups. While the available data suggest that modafinil is generally well tolerated and may have some efficacy in the treatment of antipsychotic-induced sedation and cognitive domains, the small sample sizes, contradictory results, and methodological differences between trials, especially with respect to cognitive testing, make it difficult to draw firm conclusions about the overall effectiveness of modafinil as an adjunct in the treatment of schizophrenia. Well-powered, prospective, randomized placebo-controlled trials using the MATRICS battery concomitantly with functional outcome measures are necessary to elucidate modafinil's efficacy and effectiveness as an adjunctive treatment for sedation, negative symptoms, and cognitive deficits in schizophrenia. Hence, before prescribing modafinil to a schizophrenia patient, the possible risks and benefits of each particular case should be evaluated.