This study compares the efficacy and tolerability of olanzapine versus risperidone among patients with schizophrenia who are established in outpatient psychiatric care and entering supported employment. A multicenter, randomized, double-blind trial was conducted among 107 outpatients with schizophrenia, who were cross-titrated to flexible dose risperidone or olanzapine over 2 weeks. Clinical endpoints included time to hospitalization and persistence on assigned medication. Weight, laboratory tests, psychopathology, neurologic side effects, social adjustment and role functioning were assessed at 3-6 month intervals. Data were analyzed first by randomized treatment, and then reassessed controlling for prior medication treatment. The proportion of patients on assigned medication at 18 months was 30.9% for risperidone and 37.3% for olanzapine. Mean doses were 6.4 ± 3.2 mg daily for risperidone, and 17.0 ± 5.0 mg daily for olanzapine. The groups did not differ significantly in time to medication discontinuation, first hospitalization or first employment. There were few differences in psychopathology, laboratory, or neurological assessments between groups at 18 months. Patients randomized to olanzapine gained modestly more weight. Controlling for pre-randomization medication suggested improvement in some aspects of psychopathology from switching medications; however, switching from olanzapine to risperidone was associated with more hospitalizations. Risperidone and olanzapine have similar efficacy and tolerability in patients with schizophrenia who are participating in supported employment. Randomization to olanzapine was associated with more weight gain, but randomization from olanzapine to risperidone appeared to be associated with a greater likelihood of hospitalization. Careful monitoring of metabolic effects and participation in supported employment may have contributed to minimal weight gain and metabolic effects.