Abstract Fluency deficits have been associated with poor community functioning in patients with schizophrenia. In our previous study we demonstrated that the ability to generate higher-quality responses on tasks of divergent thinking as measured by several fluency tests was impaired in patients with schizophrenia. The purpose of the present study was to investigate the contribution of the deficits in divergent thinking to community dysfunction in schizophrenia. Forty Japanese outpatients with schizophrenia and 32 healthy control subjects were recruited for this study and assessed over a broad spectrum of the neurocognitive domain. Their capacity for divergent thinking was assessed by idea, design, and word fluency tests. Community functioning was assessed by using the Global Assessment of Functioning (GAF), the Life Assessment Scale for the Mentally Ill (LASMI), and the Social Functioning Scale (SFS). The results confirmed the qualitative deficits of divergent thinking in schizophrenia. Stepwise multiple regressions using neurocognitive and demographic/clinical variables as predictors revealed that the higher-quality response scores on the tasks of divergent thinking significantly contributed to community functioning. Moreover, the deficit on the verbal task of divergent thinking significantly contributed to impairment in the area of daily living, and the deficit on the nonverbal task of divergent thinking significantly contributed to impairment in the area of interpersonal relations. The results of this study reveal the importance and the possibility of cognitive remediation and cognitive training with strategies that target capacity for divergent thinking to improve community functioning in patients with schizophrenia.