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This study investigated intrinsic motivation as a mediator of the relationship between clinical symptoms and functioning. The mediation model was tested with a sample of 166 adults with schizophrenia spectrum disorders attending psychosocial rehabilitation programs in a diverse urban community. Ethnic minority status was examined as a moderator of the mediation model. Motivation was measured using items reflecting intrapsychic drive. Symptoms were assessed with the expanded Brief Psychiatric Rating Scale and functioning with the Role Functioning Scale. Motivation was a significant mediator of the relationship between functioning and all symptom scores; fully mediating the relationship between functioning and negative, disorganized, and global symptoms, and partially mediating the relationship between positive symptoms and functioning. Motivation scores between ethnic minority and nonminority individuals differed significantly (p < 0.05), but no moderation effect was indicated. The strong mediation effect schizophrenia of motivation on the symptoms-functioning relationship supports future work to translate findings into effective recovery-oriented services.