Schizophrenia is a major cause of disability worldwide. As new treatments for functioning are tested, the need grows to demonstrate real-world functioning gains. Ecological momentary assessment (EMA) may provide a more ecologically valid measure of functioning. In this study, smartphone-based EMA was used to signal participants with schizophrenia (N = 100) and controls (N = 71) 7 times a day for 7 days to respond to brief questionnaires about social interactions and functioning behaviors. Excellent adherence was found, with both groups completing an average of 85% of surveys and only 3% of participants with schizophrenia excluded for poor adherence. Four-week test-retest reliability was high (r = .83 for total productive behaviors). Relative to controls, participants with schizophrenia reported significantly less total productive activity (d = 1.2), fewer social interactions (d = 0.3), more nonproductive behaviors (d = 1.0; watching TV, resting), and more time at home (d = 0.8). Within the schizophrenia group, participants living independently showed better functioning on EMA relative to participants in supported housing (d = 0.8) and participants engaged in vocational activities showed better functioning than individuals not engaged in vocational activities (d = 0.55). Modest correlations were found between EMA and an in-lab self-report measure of functioning activities performed in the community, but not between EMA and measures of functional capacity or potential. This study demonstrated the feasibility, sensitivity reliability, and validity of EMA methods to assess functioning in schizophrenia. EMA provides a much-needed measure of what individuals with schizophrenia are actually doing in real-world contexts. These results also suggest that there may be important disjunctions between indices of abilities and actual real-world functioning.