OBJECTIVE: The aim of this study is to examine social functioning in patients with schizophrenia and bipolar disorder and explore the psychological and neurophysiological predictors of social functioning. METHODS: Twenty-seven patients with schizophrenia and thirty patients with bipolar disorder, as well as twenty-five healthy controls, completed measures of social functioning (questionnaire of social functioning), neurocognition (Verbal fluency, Korean-Auditory Verbal Learning Test), and social cognition (basic empathy scale and Social Attribution Task-Multiple Choice), and the childhood trauma questionnaire (CTQ). For neurophysiological measurements, mismatch negativity and heart rate variability (HRV) were recorded from all participants. Multiple hierarchical regression was performed to explore the impact of factors on social functioning. RESULTS: The results showed that CTQ-emotional neglect significantly predicted social functioning in schizophrenia group, while HRV-high frequency significantly predicted social functioning in bipolar disorder patients. Furthermore, emotional neglect and HRV-HF still predicted social functioning in all of the subjects after controlling for the diagnostic criteria. CONCLUSION: Our results implicated that even though each group has different predictors of social functioning, early traumatic events and HRV could be important indicators of functional outcome irrespective of what group they are.