A representative sample of 227 first-contact schizophrenic patients (according to DSM-III) was followed up for 5 years. The psychiatric teams responsible for the treatment of the patients conducted detailed standardized interviews with the patients at entry and at the end of the first, second and fifth years. Changes in patients' clinical and functional outcome were analysed according to their living situation and social network. Positive changes in clinical state and functional ability were most prominent among patients who were living with their spouse. The social and functional outcome of men living with their parents was better than that of women in the same situation, while among patients living alone or with some other person the gender difference was reversed. Family environment can be of great importance to schizophrenic patients, supporting their clinical and functional recovery from psychosis. Patients living outside families--and men in particular--are at great risk of poor outcome, perhaps because they often lose their social contacts. In the treatment of such individuals a more active strategy of out-patient and rehabilitative care is therefore needed.