Background: Cognitive behavior therapy (CBT) has been found to be generally effective for persons with schizophrenia. Less is known however about those who will engage in this treatment, and among those who engage, who benefits more versus less from this intervention. Aims: This study sought to identify factors associated with treatment engagement and response in persons with psychosis engaged in CBT focused on enhancing work function. Method: Participants were 50 adults with schizophrenia-spectrum disorders participating in a randomized control trial that offered both CBT and a protected employment position over 26 weeks. Survival analysis and discriminant analyses were used to analyze the data. Results: Results indicated that poor treatment engagement and engagement in work was associated with lower educational attainment, more severe baseline levels of negative symptoms, and lower baseline scores on the Arithmetic and Digit Symbol subscales of the WAIS-III. Amongst those participants who did engage, younger age and poorer working memory as assessed by the Arithmetic subscale predicted shorter initial job tenure. More severe levels of positive symptoms and lower self-esteem during the later stages of treatment were associated with worse employment outcomes across the study period. Conclusions: These findings evidence differential predictors of engagement and success and suggest that a subgroup of persons with schizophrenia engaged in CBT and a vocational placement are at risk for poor functional outcomes associated with psychological factors that evolve over time.