Functional recovery as a consumer-centered approach is critical to recovery for community-dwelling people with schizophrenia. The current study investigated the mediating role of positive thinking in the relationship between depression and functional recovery in community-dwelling people with schizophrenia in South Korea. Depression, positive thinking, and functional recovery measures were completed by 158 people with schizophrenia in the community with self-reported questionnaires. Depression had a significantly negative influence on functional recovery. Positive thinking fully mediated the relationship between depression and functional recovery. An effective intervention strategy for functional recovery in this population may reinforce positive thinking and depression management. [Journal of Psychosocial Nursing and Mental Health Services, 61(2), 44-52.].