Individuals with schizophrenia exhibit consistent deficits in social cognition such as emotion perception, attributional style, and theory of mind, which may be targets of psychosocial treatments. Previous intervention studies have typically focused on only one aspect of social cognition and have not assessed generalization of treatment to improvements in social functioning. This paper describes preliminary data from a new group-based treatment, Social Cognition and Interaction Training (SCIT), aimed at improving social cognition in schizophrenia. Eighteen inpatients with schizophrenia spectrum disorders completed SCIT and were compared with 10 inpatients who completed a coping skills group. Participants were assessed at pre-test and post-test on measures of emotion and social perception, theory of mind, attributional style (e.g., blame, hostility, and aggression), cognitive flexibility, and social relationships. We also collected data on the frequency of aggressive incidents on the treatment ward. The results showed that compared to the control group, SCIT participants improved on all of the social cognitive measures and showed better self-reported social relationships and fewer aggressive incidents on the treatment unit at post-test. Importantly, this change was independent of changes in clinical symptoms over time and supports the unique role of SCIT in improving social cognitive deficits in schizophrenia.