The primary purpose of the study was to contribute to the validation of a recently developed test of functional abilities, the Bay area Functional Performance Evaluation (BaFPE). On the premise that aspects of intelligence influence functional performance, three subscales of the Wechsler Adult Intelligence Scale (WAIS) were administered, in conjunction with the BaFPE task-oriented assessment (TOA), to a sample of 60 psychiatric inpatients with diagnosed depression or schizophrenia. The three subscales (picture completion, block design, and digit symbol) correlated significantly with the TOA, thus supporting its validity. A second goal was to determine what variables were predictors of functional performance. Age and history of electroconvulsive treatments were negatively associated with the TOA, and level of education was positively associated with it. Variables not associated with the TOA were diagnosis, gender, amount of medication, type of medication, number of admissions, and total time spent in a hospital in the past 2 years. Research and clinical implications are discussed.