Schizophrenia may affect a mother's ability to parent. We investigated out-of-home placements among children with a biological mother having schizophrenia, and their relation to maternal characteristics and adverse perinatal health outcomes of the offspring. For each Finnish woman born between 1 JAN 1965 – 31 DEC 1980 and diagnosed with schizophrenia before 31 DEC 2013 (n = 5214), five matched controls were randomly selected from the Finnish Central Population Register. Children born to these women were identified and followed till 31 DEC 2013. The Child Welfare Register, the Medical Birth Register and the Register of Congenital Malformations were used to gather information. Altogether 35.1% of children with an affected mother and 3.2% of control children were placed out of home during the follow-up. The incidence rate ratio (IRR) of out-of-home placement among children with an affected mother was 12.6 (95% confidence interval (CI) 10.80–13.46) when children with a non-affected mother served as a reference. Single motherhood (IRR 2.2, 95% Cl 1.88–2.60) and maternal smoking (IRR 1.9, 95% Cl 1.68–2.16), but not an adverse perinatal outcome of the offspring, increased the risk of out-of-home placement. To conclude, maternal schizophrenia is a strong risk factor for placement of children in out-of-home care.