Aim: Compare medication utilization, costs and healthcare resource use in schizophrenia patients with substance-related disorders initiated on once-monthly paliperidone palmitate (PP1M) or an oral atypical antipsychotic (OAA). Materials & methods: Data from six Medicaid states (07/2009-03/2015) were used to compare outcomes between PP1M and OAA patients. Results: PP1M patients had higher 12-month antipsychotic adherence and persistence than OAA patients. PP1M patients had lower medical (mean monthly cost difference [MMCD] = US$-191, p = 0.020), higher pharmacy (MMCD = US$250, p < 0.001) and similar total costs (MMCD = US$59, p = 0.517) during the overall follow-up. PP1M patients had lower rates of outpatient visits and inpatient days but higher rates of mental health-related utilization. Conclusion: PP1M was associated with higher antipsychotic adherence and persistence, and similar total costs versus OAA.