We developed and tested the validity of a brief scale to assess everyday functioning in persons with serious mental illness. Asample of 434 adults with schizophrenia or schizoaffective disorder were administered the University of California, San Diego, Performance-Based Skills Assessment (UPSA), which assesses functional skills in 5 areas of life functioning (eg, finances and planning). Through use of factor analysis, we developed the UPSA-Brief, which consists of 2 subscales ( communication and financial) from the original UPSA. UPSA-Brief scores were correlated with cognitive functioning, symptoms of psychosis, age, and education. We further tested the sensitivity and specificity of the UPSA-Brief for predicting residential independence using receiver- operating characteristic (ROC) curves. Finally, sensitivity to change was assessed through comparison of 2 interventions for improving UPSA-Brief scores. UPSA-Brief scores were highly correlated with scores on the full version of the UPSA (r = 5.91), with overall cognitive functioning ( r = 5.57), and with negative symptoms (r = -.32). The discriminant validity of the UPSA-Brief was adequate ( ROC area under the curve [AUC] = 0.73; 95% confidence interval [CI]: 0.67-0.78), with greatest dichotomization for the UPSA-Brief at a cutoff score of 60. The UPSA-Brief was significantly better than the Dementia Rating Scale, Positive and Negative Syndromes Scale positive, and Positive and Negative Syndromes Scale negative at predicting residential independence (all P values <.05). Participants receiving a behavioral intervention also improved significantly compared with a support condition ( P = .023). The UPSA-Brief has adequate psychometric properties, predicts residential independence, is sensitive to change, and requires only 10-15 minutes to administer. Therefore, the UPSA-Brief may be a useful performance-based functional outcome scale.