BACKGROUND The declining incidence of schizophrenia observed in several countries is believed by many to merely reflect methodological problems in the studies performed. We report the first nationwide historical cohort study of changes in the incidence of schizophrenia, in which many of the previous methodological problems were overcome. METHODS We used the Finnish Population Register to identify everyone born in Finland from 1954 to 1965. These persons were followed up from their 16th to their 26th birthdays, and all cases of schizophrenia (International Classification of Diseases, Eighth Revision and International Classification of Diseases, Ninth Revision code 295) that emerged were identified from the National Hospital Discharge Register, the Pension Register, and the Free Medicine Register. Persons for whom an age of onset could be defined were included in the analyses (n = 5645). We used the Poisson regression model to estimate the effects of age, sex, birth cohort, period of diagnosis, and season of birth on the incidence of schizophrenia. The relative importance of cohort and period were assessed using an age-period-cohort model. RESULTS The incidence declined significantly in each successive cohort, from 0.79 to 0.53 per 1000 among males and from 0.58 to 0.41 per 1000 among females. The effects of cohort and period on the change were both significant. CONCLUSIONS The incidence of schizophrenia has declined in Finland. This was partly caused by confounding factors, as reflected in the significant period effect. The significant birth cohort effect suggests that the intensity or frequency of one or more risk factors for schizophrenia has decreased.