Objectives: To investigate the effectiveness of a long established intervention, occupational therapy for people with psychotic conditions, and to inform future research designs.Design: A pilot randomized controlled trial.Setting: Two community mental health teams in a UK city.Participants: Forty-four adults with schizophrenia or other psychotic conditions, eligible for enhanced care and having functional problems.Interventions: Twelve months of individualised occupational therapy (OT) in community settings, as an adjunct to usual care and compared to treatment as usual (TAU). A two to one randomisation ratio was used to enable more people to receive OT. Results: Both groups' scores on SFS and SANS showed significant improvement over 12 months. For SFS, the OT group scores were: mean difference = 2.33, CI: 0.39 to 4.27, t = 1.525, P= 0.020 and the TAU group were: mean difference = 6.17, CI: 1.04 to 11.29, t = 2.65, P = 0.023. For SANS, OT group scores were: mean difference = -16.25, CI: -22.94 to -9.56, t = -4.99, P <0.001 and the TAU group: mean difference = -17.36, CI: -29.78 to -4.94, t = -3.12, P = 0.011. There were no differences between the two groups on any of the outcome measures. After 12 months the OT group showed clinically significant improvements that were not apparent in the control group. The OT group showed clinical improvement in 4 subscales of the SFS: relationships, independence performance, independence competence, and recreation. Out of 30 people receiving OT those with a clinical level of negative symptoms reduced from 18 (64%) to 13 (46%) P = 0.055.