Social cognitive impairments are core features of schizophrenia and are closely associated with poor functional outcome. This study sought to identify specific aspects of social cognition and their relationships to measures of social function, quality of life, and neurocognition. Principal component analysis was performed using social cognitive measures in patients with schizophrenia and healthy matched controls and revealed three factors: Interpersonal Discomfort, Basic Social Cognition, and Empathy. Patients had higher scores on Interpersonal Discomfort and lower scores on Basic Social Cognition than controls, but the two groups were the same on Empathy. Lower social performance was significantly correlated with poor Basic Social Cognition in patients and with high Interpersonal Discomfort in controls. While neurocognition was significantly associated with Basic Social Cognition in both groups, it was not associated with Empathy. Social cognitive interventions should emphasize improving basic social cognitive processing deficits, managing Interpersonal Discomfort, and utilizing preserved capacity for empathy as a potential strength in social interactions.