Introduction: Paliperidone, the 9-hydroxy metabolite of risperidone, is a second-generation antipsychotic that was recently approved for the treatment of schizophrenia. It is marketed as an improvement over risperidone, but is likely to be considerably more costly when risperidone is no longer protected by patent. Aims: To review the evidence for the clinical impact of paliperidone in the treatment of patients with schizophrenia, particularly in contrast to risperidone. Evidence review: Paliperidone is primarily metabolized and excreted renally, and thus may be of particular utility for patients with hepatic impairment. There is clear evidence that paliperidone is more efficacious than placebo in reducing the positive and negative symptoms of schizophrenia. In patients with schizophrenia, paliperidone has been shown to stabilize acute psychotic symptoms. There is some evidence that it can prevent relapse in stabilized patients. Studies on the cost effectiveness of paliperidone are needed. Most importantly, there are no trials comparing paliperidone directly with other second-generation antipsychotics. Place in therapy: Until direct efficacy and cost effectiveness comparisons are made with risperidone, it is difficult to justify paliperidone use over risperidone. It will become even harder to justify when risperidone becomes available as a less expensive generic medication.