We performed a study to assess the relationship between impairment of insight and the long-term outcome in affective and anxiety disorders. Standardized insight assessments were made using the Scale to Assess Unawareness of Mental Disorder (SUMD) in 101 outpatients with psychiatric disorders, mostly affective and anxiety disorders, treated over 1 year in a university-based clinic. Outcome was prospectively assessed with the Clinical Global Impression (CGI) and Global Assessment of Functioning (GAF) rating scales. The mean follow-up period was 3.9 months. Initial Impairment of insight did not correlate with poor outcome. However, improvement in insight correlated with good outcome, particularly in bipolar disorder type I (r = .56 to .67, P = .0005), Insight was similarly impaired in bipolar and unipolar major depressive disorders, and more so than in anxiety disorders (P = .002), An association between a lack of improvement in insight and a poor outcome, most significantly in bipolar disorder type I, was observed in this sample. We found a greater relative impairment of insight in mood versus anxiety disorders. Copyright (C) 2000 by W.B. Saunders Company.