Objective: Neuropsychologists are increasingly concerned with assessment of functional outcomes. Deficits in functional abilities are a major focus of assessment in individuals with serious mental illnesses and shown to be predicted by negative symptoms. As with positive symptoms, negative symptoms and cognitive deficits cut across many psychiatric disorders and as such could be considered transdiagnostic. This study investigates associations among negative symptoms in individuals with bipolar disorder (BD) and schizophrenia (SZ) in order to clarify whether associations between negative symptoms and functional outcomes reported in SZ are also present in BD. Method: Individuals diagnosed with BD (n = 47) or SZ (n = 50), were rated on current negative symptoms using the Scale for the Assessment of Negative Symptoms (SANS) motivation/pleasure and emotional expressivity subscales. Functional outcome was measured using the Birchwood Social Functioning Scale and UCSD performance based skills assessment (UPSA). Results: One-way ANOVA indicated that the SZ group had lower functioning and higher negative symptoms, particularly for emotional expressivity, than the BP group. Both SANS subscales significantly correlated with UPSA and Birchwood total scores for the entire group and Birchwood total in SZ. Emotional expressivity significantly correlated with UPSA total score in SZ. Motivation/pleasure significantly correlated with Birchwood total in BD. Conclusion(s): Findings indicate negative symptoms are predictive of functional outcomes across diagnostic boundaries. Emotional expressivity was more predictive of performance-based functioning (UPSA), while motivation/pleasure was more predictive of self-report functioning (Birchwood). The results suggest different types of functional assessment tap into fundamentally different domains of functioning, and support a multimethod approach to assessing functional outcomes.