Objective:  Bipolar disorder (BPD) is associated with significant functional morbidity at a rate which is particularly elevated among patients discharged from hospital. The aim of this study was to examine the degree to which neurocognitive test performance, measured following hospitalization for an acute affective episode, is predictive of functional recovery 1 year later. Methods:  Seventy‐eight Zucker Hillside Hospital patients aged 18–59 years and having Structured Clinical Interview for DSM‐IV diagnosis of bipolar I disorder (BPD I), bipolar II disorder (BPD II) or BPD not otherwise specified (NOS) confirmed through a rigorous diagnosis consensus procedure, underwent a comprehensive neurocognitive test battery after initial stabilization (baseline) and were followed for at least 12 months (follow‐up). Hamilton Depression Rating Scale (HAM‐D) and Clinician‐Administered Rating Scale for Mania (CARS‐M) ratings were made at baseline and follow‐up. At follow‐up, functionality was assessed using the Multidimensional Scale for Independent Functioning (MSIF). Logistic regression was used to examine the predictive value of each of six validated neurocognitive domains for determining functionality (MSIF) at follow‐up. Baseline and follow‐up HAM‐D and CARS‐M were entered as covariates as was number of days between baseline and follow‐up. Results:  Attention and Ideational Fluency were significantly predictive of functional recovery 12 months later. Residual mania but not depression was associated with 12‐month MSIF rating. Lithium and benzodiazepine treatment at the time of neurocognitive testing did not affect the results. Conclusions:  This is the first study examining the predictive value of neurocognitive deficits, independent of residual mania or depression, for long‐term functional recovery following hospitalization. Selective neurocognitive deficits are predictive of long‐term functional recovery and, as such, should be candidate targets in treatment and rehabilitation programs.

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