Objective: Patients with a diagnosis of schizophrenia display cognitive impairments and abnormal sensitivity to stress. However, little is known about the relationship between these two endophenotypes. Method: Neuropsychological tests were administered to 42 patients with schizophrenia or other psychosis to assess cognitive functioning, and the experience sampling method to structured diary technique assessing current context and mood in daily life was used to assess 1) appraised subjective stress related to daily events and activities and 2) emotional reaction to these daily life stressors. Results: Multilevel random regression analyses showed that in some instances, cognitive functioning did not alter emotional reaction to stress. In other instances, an inverse relationship was found, indicating that a better performance on neuropsychological tests was related to greater emotional reaction to stress. Conclusions: The results indicate that emotional reaction to stress in the daily lives of patients with schizophrenia may not be a consequence of cognitive impairments and that the two mechanisms may act through different pathways. Such pathways may be related to the extremes of clinical outcome that have been observed in schizophrenia: an episodic, reactive, good outcome and a more chronic form characterized by high levels of negative symptoms and cognitive impairments.