D istinguishing individuals with bipolar and schizophrenia spectrum disorders can be a challenging diagnostic task for assessment psychologists. Some may ask why this is the case. After all, for more than a century, diagnosticians have separated the disorders into distinct categories of severe psychopathology. Beginning with Kraepelin's distinction between dementia praecox and manic depressive insanity (Kraepelin, 1896(Kraepelin, /1921a(Kraepelin, , 1921b, and through multiple iterations in the Diagnostic and Statistical Manual of Mental Disorders (DSM) and International Statistical Classification of Diseases and Related Health Problems (ICD), schizophrenia and bipolar disorders have been categorized as different families of mental disorders. However, despite this traditional categorical approach, the boundary between the disorders is not clearly delineated, making differential diagnosis a practical challenge for assessment psychologists.In this chapter, we examine conceptual and diagnostic issues that make the distinction between bipolar and schizophrenia spectrum disorders a challenge and then look at the distinguishing features of these disorders. In discussing the role of assessment, we will not duplicate instrument-specific findings presented in Parts I and II of this volume, which highlight the role of self-report and performance-based methods in diagnosing bipolar spectrum disorders. Instead, our task is to review contemporary issues and controversies and to identify areas in which schizophrenia and bipolar disorders overlap and diverge, in order to aid in differential diagnostic decision making.