WHAT IS KNOWN ON THE SUBJECT?: People living with schizophrenia have reduced physical function and are more likely to experience loneliness than those without condition. Low physical function is associated with greater loneliness in people with psychosis. However, it is unclear whether social isolation and loneliness contribute to impaired physical function in this population. Loneliness is linked to an increased risk of physical function impairment among older individuals, but research on patients living with schizophrenia is limited. WHAT THIS PAPER ADDS TO EXISTING KNOWLEDGE?: This study is the first to evaluate the longitudinal association of social isolation and loneliness with physical function among inpatients living with schizophrenia. It showed that more than one third of the participants experienced a decline in physical function over a 2-year period. Loneliness, rather than social isolation, was associated with an increase in physical function impairment over 2 years among inpatients living with schizophrenia. WHAT ARE THE IMPLICATIONS FOR PRACTICE?: Healthcare professionals should recognize loneliness as a potential risk factor for impaired physical function among inpatients diagnosed with schizophrenia. It is recommended that people living with schizophrenia are assessed for loneliness and that interventions are offered to alleviate their feelings of loneliness. Implementing interventions to reduce loneliness may help improve physical function and overall quality of life for individuals living with schizophrenia.