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The use of typical antipsychotics is limited in children with schizophrenia, owing to the high rate of response failure and early appearance of extrapyramidal syndromes as well as tardive and withdrawal dyskinesia. The aim of the present study was to examine the effectiveness of the atypical antipsychotic olanzapine in the treatment of childhood-onset schizophrenia. The study sample included nine children hospitalized for schizophrenia who had proven refractory to treatment with at least two antipsychotic drugs. Olanzapine was administered after a 2-week washout period in gradually increasing doses to a maximum of 5 mg/day on day 5 and 10 mg/day in week 3; six patients received up to 20 mg/day as of week 5. The duration of the study was 12 weeks. Patient psychiatric status was measured with three scales at onset of therapy and thereafter once weekly. Patients also underwent regular blood, laboratory, and liver function tests, and we also monitored their blood pressure and weight and performed electrocardiography and electroencephalography. A reduction in all psychopathology scores was obtained at 12 weeks from baseline. All extrapyramidal symptoms of previous medications resolved, and there were no new incidents. Side effects were mild. There were no adverse changes in blood chemistry, hematological tests, or electrocardiography parameters, but the treatment was associated with a significant weight gain (6.10 ± 3.25 kg). At 1-year follow-up, the improvement in psychiatric symptoms was sustained in eight children. We conclude that olanzapine may have potential as a first-line drug in the treatment of drug-resistant childhood-onset schizophrenia. Large-scale, double-blind, placebo-controlled comparative studies are needed to clarify the role of the various atypical antipsychotics in both treatment-resistant and treatment-naïve populations with psychotic symptoms/disorders.