This study evaluated the effectiveness of a skills training program designed to teach disease management to Latinos with schizophrenia treated at a community mental health center. Ninety-two Latino outpatients with schizophrenia and their designated relatives were randomly assigned to 3 months of skills training (ST) versus customary outpatient care (CC) and followed for a total of 9 months. The skills training approach was culturally adapted mainly by including the active participation of key relatives to facilitate acquisition and generalization of disease management skills into the patients' natural environment. There was a significant advantage for the ST group over the CC group on several symptom measures, skill acquisition and generalization, level of functioning, and rates of rehospitalization. There were no significant differences between the groups on quality of life or caregiver burden. Skills training had a direct effect on skill acquisition and generalization, and utilization of disease management skills led to decreased rates of rehospitalization. Incorporating an intensive, culturally relevant generalization effort into skills training for Latinos with schizophrenia appeared to be effective in teaching disease management and viable in a community mental health center.