BACKGROUND: Many patients with schizophrenia and bipolar disorder have impaired insight and low medication adherence. The aim of this post hoc analysis was to explore the relationship between insight and medication adherence. METHODS: We included 903 patients with schizophrenia or bipolar disorder who participated in an observational study conducted in Europe on the outcomes of patients treated with two oral formulations of olanzapine over a 1-year period. Evaluations included Clinical Global Impression (CGI), Global Assessment of Functioning (GAF), insight (Scale to Assess Unawareness of Mental Disorder, SUMD) medication adherence (Medication Adherence Rating Scale, MARS), and therapeutic alliance (Working Alliance Inventory, WAI). RESULTS: Medication adherence was higher in bipolar patients (mean MARS score (SD) 6.5 (2.8) versus 5.8 (2.7) in schizophrenia; p < 0.001). Patients with schizophrenia had lower insight (i.e., SUMD item 1, unawareness of mental disorder, mean (SD) of 2.5 (1.3) in schizophrenia versus 1.9 (1.2) in bipolar, p < 0.001). Better insight was associated with higher adherence (Spearman Correlation Coefficient, SCC, ranging from 0.39 to 0.49 for the three SUMD general items, p < 0.0001 in all cases). Higher insight was related to a stronger therapeutic alliance (SCC ranging from 0.38 to 0.48, p < 0.0001). A path analysis revealed a positive impact of insight on adherence and alliance and that stronger alliance was related to lower clinical severity (lower CGI score). CONCLUSION: Insight and adherence were found to be closely related. Insight impacts on the therapeutic alliance with mental health professionals. These factors are associated to treatment outcomes.