Bipolar disorder is characterized by recurrent episodes of depression and/or mania along with interepisodic mood symptoms that interfere with psychosocial functioning. Despite periods of symptomatic recovery, individuals with bipolar disorder often continue to experience impairments in psychosocial functioning, particularly occupational functioning. Two determinants of psychosocial functioning of euthymic (neither fully depressed nor manic) individuals with bipolar disorder are residual depressive symptoms and cognitive impairment (i.e., difficulties with executive functioning, attention, and memory). The present study explored whether a new cognitive remediation (CR) treatment designed to treat residual depressive symptoms and, for the first time to the best of our knowledge, address cognitive impairment would be associated with improvement in psychosocial functioning in individuals with bipolar disorder. Following a neuropsychological and clinical assessment 18 individuals with DSM-IV bipolar disorder were treated with 14 individual sessions of CR. Results indicated that at the end of treatment, as well as at the 3-months follow-up, patients showed lower residual depressive symptoms, and increased occupational, as well as overall psychosocial functioning. Pretreatment neuropsychological impairment predicted treatment response. Improvements in executive functioning were associated with improvements in occupational functioning. These findings suggest that treating residual depressive symptoms and cognitive impairment may be an avenue to improving occupational and overall functioning in individuals with bipolar disorder.