Objective: Deficits in intellectual ability and functional outcome are consistently found in schizophrenia (SZ). Recently, there has been a growing interest in the role of psychotic symptoms in bipolar disorder (BP) as markers for impairment typically associated with SZ. This study examined intellectual ability and functional outcome in BP with psychotic features (BP+), BP without psychotic features (BP-), SZ, and normal controls (NC). Method: Individuals (71 SZ, 60 BP + , 68 BP-, 51 NC) were assessed using the UCSD Performance Based Skills Assessment (UPSA), which assesses everyday functioning in five domains (comprehension, finance, transportation, and household skills). Additionally, subtests from the Wechsler Adult Intelligence Scale-III were used to estimate IQ. Results: Results indicated that the SZ group performed worse on all domains of the UPSA and had a lower estimated IQ compared to the BP + , BP-, and NC groups (p < .05). Only performance on the transportation scale of the UPSA differentiated BP + , BP- and NC groups, with the BP+ group performing significantly lower (p < .05). Estimated IQ did not differ between the BP + , BP-, and NC groups and was correlated with all UPSA domains. Conclusion(s): Consistent with previous findings, results indicate impaired intellectual functioning and deficits across functional domains in SZ. This study extends findings to BP, indicating that the transportation scale of the UPSA may be sensitive to psychotic symptoms. Given that intellectual abilities did not differ between BP+ and BP-, further research should investigate cognitive processes underlying this impairment as a potential therapeutic target relevant for improving everyday functioning in the disorder.