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Background: Clozapine is the most effective medication for the positive symptoms of treatment-refractory schizophrenia. Although clozapine use is associated with fewer admissions, less is known about the impact of clozapine cessation on hospitalisation., Aims: The aims of this study were to investigate whether clozapine-reduced psychiatric inpatient admissions and bed days, and investigate patient factors associated with these changes from a sample of 1906 people commenced on clozapine., Methods: All people commencing clozapine during an acute hospitalisation over a 10-year period in Queensland, Australia, were included in this retrospective cohort study. A mirror image design was used to compare psychiatric bed days and hospitalisations 2 years before and after clozapine treatment, and the impact of clozapine continuation or early cessation. Changes in psychiatric bed days and hospitalisations were analysed using linear regression, adjusting for the duration on clozapine, sex, age, indigenous status, country of origin and time to clozapine commencement., Results/outcomes: There was a significant reduction in bed days (29.55 days vs 24.46 days, p < 0.001) and admissions (2.27 vs 1.87 < 0.001) associated with clozapine commencement. This remained significant among clozapine continuers, but not among those with early cessation. Longer duration on clozapine was associated with greater reductions in psychiatric bed days and admissions. Age, sex and time to clozapine commencement, indigeneity and country of origin did not impact outcomes., Conclusion/interpretation: Longer clozapine therapy led to a greater reduction in psychiatric bed days and hospitalisations. Early cessation was associated with a return to pre-clozapine levels of bed days and admissions.