Background Schizophrenia affects approximately 1% of the population and is associated with a considerable economic burden to society. The healthcare costs of the disorder are high and are compounded by substantial productivity losses. Failure to adhere to medication regimens, with subsequent relapse and hospitalization, is a key driver of these costs. A long-acting injectable formulation of the second generation antipsychotic risperidone (risperidone long-acting injection [risperidone LAI]) was licensed in New Zealand and received full government funding in October 2005. Second generation antipsychotics may have some efficacy advantages, be associated with fewer adverse effects and could improve adherence. However, the acquisition cost of risperidone LAI is higher than that of first generation antipsychotics and healthcare decision makers need information that allows them to determine whether risperidone LAI represents a cost-effective investment in terms of improved outcomes. Objectives To explore real-world outcomes and costs of patients treated with risperidone LAI within New Zealand. Methods A mirror-image retrospective study was conducted comparing outcomes and costs 12 months post- versus 12 months pre-initiation of risperidone LAI in all adults receiving approval for risperidone LAI between 1 October 2005 and 31 October 2006 in five health services. Continuation rates, compulsory treatment status, psychiatric hospitalization (admission number, bed-stay and cost) and treatment data were collected from clinical files and patient information systems for the 12 months on either side of the first risperidone LAI prescription. Hospitalization costs were valued using estimates for cost per admission and cost per hospital day ($NZ, year 2009 values). Results 58.3% of patients remained on risperidone LAI 12 months after initiation. Compared with the pre-risperidone LAI treatment period the mean number of admissions for the total study population was significantly lower in the post-risperidone LAI treatment period (1.38 vs 0.61, p?<?0.001) but the mean length of bed-stay increased (37.2 vs 53.3 days, p?<?0.001), as did compulsory treatment use. Overall hospital bed-nights (hospitalization days) increased by 6877 in the post-index period, driven mostly by those who discontinued treatment. Patients who continued risperidone LAI had fewer admissions and days in hospital post-risperidone LAI than patients who discontinued risperidone LAI use in the first year. The reduction in total hospital admission rates between the two treatment periods was significantly greater in the continuation group and mean difference in bed-days between the two treatment periods was significantly less for continuers (5.4 vs 31.1 days, p?<?0.001). Applying a cost per admission, hospitalization costs reduced by approximately $NZ1.7 million in the post risperidone LAI-period. Applying a daily hospitalization cost resulted in an increase of approximately $NZ3.5 million in the post-risperidone LAI period. Conclusion This study suggests that patients have reduced hospital admissions but longer bed-stay after starting risperidone LAI. Longer admissions were driven by those that discontinued treatment and continuation was associated with improved resource and cost outcomes compared with those who discontinued. These findings have potential implications for payers, providers and patients that require further investigation over a longer time frame.