This report based on research interviews conducted with persons struggling to recover from prolonged psychiatric disorders suggests that the rediscovery and reconstruction of an enduring sense of the self as an active and responsible agent provides an important aspect of improvement. This process of developing a functional sense of self in the midst of persisting psychotic symptoms and dysfunction is described, and its implications for understanding severe mental illness and processes of change are discussed. It is suggested that viewing the development of a dynamic sense of self as central to the improvement process provides a coherent thread which ties together diverse research findings concerning factors influencing course and outcome of illness. It is also suggested that for treatment and rehabilitation to elicit and foster a more functional sense of self, models of improvement will need to allow for, and encourage, a more active and collaborative role for the person with the disorder.