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Objective: Cognitive impairment is prevalent and related to functional outcome in schizophrenia, but a significant minority of the patient population overlaps with healthy controls on many performance measures, including declarative-verbal-memory tasks. In this study, we assessed the validity, clinical, and functional implications of normal-range (NR), verbal-declarative memory in schizophrenia. Method: Performance normality was defined using normative data for 8 basic California Verbal Learning Test (CVLT-II; Delis, Kramer, Kaplan, & Ober, 2000) recall and recognition trials. Schizophrenia patients (n = 155) and healthy control participants (n = 74) were assessed for performance normality, defined as scores within 1 SD of the normative mean on all 8 trials, and assigned to normal- and below-NR memory groups. Results: NR schizophrenia patients (n = 26) and control participants (n = 51) did not differ in general verbal ability, on a reading-based estimate of premorbid ability, across all 8 CVLT-II-score comparisons or in terms of intrusion and false-positive errors and auditory working memory. NR memory patients did not differ from memory-impaired patients (n = 129) in symptom severity, and both patient groups were significantly and similarly disabled in terms of functional status in the community. Conclusion: These results confirm a subpopulation of schizophrenia patients with normal, verbal-declarative-memory performance and no evidence of decline from higher premorbid ability levels. However, NR patients did not experience less severe psychopathology, nor did they show advantage in community adjustment relative to impaired patients.