To investigate sex differences in neurocognition and social functioning in schizophrenia and bipolar disorder and the possible role of sex as a moderator of this relationship. Participants with schizophrenia (60 women/94 men), bipolar I disorder (55 women/51 men), and healthy controls (158 women/182 men) were assessed with an extensive neuropsychological test battery and a social functioning questionnaire. We found significant main effects of sex for neuropsychological tests (p < .001, η² = 0.10) and social functioning (p < .001, η² = 0.05), with men scoring below women. Women performed better than men for all neuropsychological tests (except attention and working memory). Both clinical groups performed below healthy controls for all neuropsychological tests (except attention). Post hoc comparisons of persons with schizophrenia and healthy controls yielded significant interaction effects (p < .05) for three neuropsychological tests (California Verbal Learning Test II [CVLT-II], Color-Word Interference, and Interference/Switching), with men with schizophrenia being disproportionally disadvantaged compared with their female counterparts. Regression analyses investigating sex as a moderator between neurocognition and social functioning showed that neurocognition predicted social functioning in schizophrenia, whereas sex predicted social functioning in healthy controls. Sex was not a moderator in any of the three groups. This study is the first to find neurocognitive sex differences for bipolar disorder and replicated previous findings for schizophrenia. The data did not support the hypothesis that sex is a moderator between neurocognition and social functioning. Clinical implications include the use of different cognitive remediation strategies based on sex.