Theoretical models suggest that it is the interplay between social cognitive processes that result in adaptive social functioning in schizophrenia. This study explored the relative contributions of, and interplay between, cognitive empathy, affective theory of mind (ToM), neurocognition, and severity of clinical symptoms, in predicting the social functioning of individuals with schizophrenia. Clinical participants (early schizophrenia n = 26, chronic schizophrenia n = 32) were administered an ecologically valid measure of ToM (viz., the Virtual Assessment of Mentalising Ability or VAMA) and the Empathy Quotient (EQ) as part of a larger neuropsychological and social functioning assessment battery. Results indicated that individuals with early schizophrenia reported significantly better cognitive empathy than individuals with chronic schizophrenia. ToM was found to have added value in predicting both community functioning and functional capacity that was beyond that accounted for by cognitive empathy, clinical symptoms, and neurocognition for both clinical groups. Further, our results indicated that the capacity to demonstrate empathic understanding of another's situation (i.e., cognitive empathy) mediates the relationship between ToM and social functioning. Together, our findings highlight the intricate and compounding nature of social cognition constructs, and their effect on social functioning for individuals with schizophrenia.