The aim of this study was to analyze social functioning in patients with schizophrenia and their biological relatives with a Swedish version of the video-based vignette test Assessment of Interpersonal Problem Solving Skills (AIPSS). In a new video production with simulated “real life” situations we tested the ability to receive, process and send social information in 25 individuals with a DSM-IV diagnosis of schizophrenia, 20 siblings to patients with schizophrenia and 25 randomly selected non-psychiatric controls. The test proved to have good validity and interrater reliability. After controlling for positive or negative symptoms, patients had poor performance especially in acting out solutions leading to effective problem solving. Siblings generally did not differ from controls, but showed some deficiencies in non-verbal language. To conclude, AIPSS is appropriate for use in a Swedish-speaking context and might be useful in research on vulnerability indicators and in assessment of treatment interventions.