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Although cognition is one of the most important predictors of community functioning in schizophrenia, little is known about the causes of this correlation. To our knowledge, this study is the first to examine the extent to which this correlation is genetically mediated and whether the genetic correlation is specific to schizophrenia. Six hundred thirty-six participants from 43 multigenerational families with at least two relatives with schizophrenia and 135 unrelated controls underwent diagnostic interview and cognition and functioning assessment. Quantitative genetic analyses were conducted using maximum-likelihood variance decomposition methods implemented in SOLAR (Almasy & Blangero, 1998). Among patients with schizophrenia, cognition and community functioning were positively correlated and genetic effects shared between them were significant contributors to this relationship whereas environmental effects shared between them were not. In contrast, genetic effects were not shared significantly between cognition in depressed or nondiagnosed relatives and community functioning in schizophrenia. In all analyses, the contributions of social cognition to community functioning were accounted for by general cognition. These findings support heritable factors that contribute to the correlation between cognition and community functioning that are relatively specific to schizophrenia and are not significantly shared with depression or a lack of psychopathology. This suggests the possibility of identifying specific genetic variants that contribute to this correlation and to these important individual differences among schizophrenia patients.