Significant advances in the pharmacotherapy of many major psychiatric syndromes occurred in the final decade of the last millennium. However, medications neither proved to be an ultimate cure nor did they eliminate the human suffering attendant with these illnesses. As a consequence, a great number of individuals remain significantly impaired by their illness. Persons with severe and persistent mental illness generally experience their impairments in terms of ordinary living – their quality of life. From an “objective” perspective they experience deficits in financial necessities, housing, transportation, medical and psychiatric care. From a “subjective” perspective they have diminished quality and quantity of social relations and recreational activities. Group psychotherapy, focusing on problems of daily living, of developing and maintaining satisfactory social relations, has the potential for significantly improving patients’ quality of life.