Background In 2005 Andreasen proposed criteria for remission in schizophrenia. It is unclear whether these criteria reflect symptom reduction and improved social functioning in daily life. Aims To investigate whether criteria for symptomatic remission reflect symptom reduction and improved functioning in real life, comparing patients meeting remission criteria, patients not meeting these criteria and healthy controls. Method The Experience Sampling Method (ESM), a structured diary technique, was used to explore real-life symptoms and functioning in 177 patients with (remitted and non-remitted) schizophrenia spectrum disorders and 148 controls. Results Of 177 patients, 70 met criteria for symptomatic remission. These patients reported significantly fewer positive and negative symptoms and better mood states compared with patients not in remission. Furthermore, patients in remission spent more time in goal-directed activities and had less preference for being alone when they were with others. However, the patient groups did not differ on time spent in social company and doing nothing, and both the remission and non-remission groups had lower scores on functional outcome measures compared with the control group. Conclusions The study provides an ecological validation for the symptomatic remission criteria, showing that patients who met the criteria reported fewer positive symptoms, better mood states and partial recovery of reward experience compared with those not in remission. However, remission status was not related to functional recovery, suggesting that the current focus on symptomatic remission may reflect an overly restricted goal.