To determine if atypical antipsychotic agents reduce the rehospitalization rates of patients with newly diagnosed or chronic schizophrenia in comparison with typical antipsychotic drugs. From January 1, 2003, to December 31, 2004, we retrospectively compared two-year rehospitalization rates of 135 patients with newly diagnosed schizophrenia and 398 patients with chronic schizophrenia (62% and 65% men, respectively), who were initially discharged from Vrapce Psychiatric Hospital, Zagreb, with the prescription of atypical (olanzapine, risperidone or clozapine) or typical (haloperidol or fluphenazine) antipsychotic treatment between January 1, 2002 and December 31, 2002. Time-to-readmission was determined with Kaplan-Meier formula for survival analysis. In the two-year follow-up, 52 (39%) newly diagnosed patients and 197 (47%) patients with chronic schizophrenia were rehospitalized. No significant differences in time-to-rehospitalization were observed with respect to the type of medications in patients with newly diagnosed schizophrenia (P=0.378) or patients with chronic schizophrenia (P=0.531). Rehospitalization rates of patients who were prescribed atypical antipsychotic drugs were similar to those of patients who were prescribed typical antipsychotic drugs for both the group with the first psychotic episode and group with chronic schizophrenia.