The comparative usefulness of carbamazepine and lithium carbonate in the acute and prophylactic management of DSM-III diagnosed major affective, schizoaffective, or schizophreniform psychoses was investigated in a 3-year, prospective double-blind randomized trial with 83 in- and outpatients. The incidence of side effects was similar in both treatment groups, and side effects generally responded well to dosage reduction. Both drugs were effective in two thirds of the patients and appeared about equal in most outcome measures, except for a significantly higher dropout rate for patients with mood-incongruent psychotic features who were assigned to the lithium group. Both drugs appeared more effective in preventing excited rather than depressive symptoms.