Objective: To evaluate the direct medical cost of atypical antipsychotic therapy for schizophrenia among Hong Kong Chinese patients and to identify factors affecting the cost of treatment. Methods: In this retrospective database analysis, patient data were retrieved from three Hong Kong public hospitals. Patients aged >= 18 years who received an initial prescription for olanzapine, risperidone, quetiapine or amisulpride between April I and September 30,2003; and had an ICD-10-coded diagnosis of schizophrenia were included. Patient data were collected for a maximum duration of 1 year before and after treatment initiation. Primary outcome measures were the schizophrenia-related direct medical costs. Demographic and clinical factors were analyzed by multiple regression analysis to identify influential factors for the cost of atypical antipsychotic therapy. Results: A total of 325 patient records were reviewed and 82 patients were included in the analysis. Cost per patient per month for clinic visits (US$ 67 41 versus US$ 78 +/- 4 1), medications (US$ 8 +/- 12 versus US$ 97 +/- 83), and the total cost per patient per month (US$ 314 +/- 898 versus US$ 431 +/- 914) increased significantly after treatment initiation (US$ 1 = HK$ 7.8). Previous duration of hospitalization (RR = 1.00, 95% CI = 1.00 - 1.01), historyof substance abuse (RR= 1.26,95% CI = 1.05 - 1.52) and use of depot antipsychotics (RR = 1.22, 95% CI = 1.05 - 1.42) were associated with higher cost of atypical antipsychotic therapy. Conclusion: The total direct medical cost increased significantly after initiation of atypical antipsychotic therapy in a cohort of Chinese patients with schizophrenia. History of drug abuse, use of depot antipsychotics and prior duration of hospitalization were positive predictors of cost of therapy.