This study investigated the relationship between prior course of illness and neuropsychological deficits in relatively high functioning outpatients with bipolar disorder. Forty-nine bipolar I or II patients, in a relatively euthymic state during treatment with mood stabilizers, were administered neuropsychological tests that assessed a variety of functions, including verbal memory, sustained attention and vigilance, and intelligence. A detailed retrospective life chart was completed for each patient using the NIMH Life Chart Method" to define variables reflecting duration and severity of illness, and frequency of episodes. Stepwise multiple regression analyses show that several different measures of a more severe course of prior illness related to greater duration and a larger number of affective episodes and hospitalizations were associated with poorer performance on tests of abstraction, attention and memory. The results indicate that bipolar patients with a more severe prior course of illness and a greater number of affective episodes have more impaired neuropsychological functioning. The direction of causality and the pathophysiological mechanisms remain to be explored.