Clozapine can cause severe adverse effects yet it is associated with reduced mortality risk. We test the hypothesis this association is due to increased clinical monitoring and investigate risk of premature mortality from natural causes. We identified 14 754 individuals (879 deaths) with serious mental illness (SMI) including schizophrenia, schizoaffective and bipolar disorders aged ≥ 15 years in a large specialist mental healthcare case register linked to national mortality tracing. In this cohort study we modeled the effect of clozapine on mortality over a 5-year period (2007–2011) using Cox regression. Individuals prescribed clozapine had more severe psychopathology and poorer functional status. Many of the exposures associated with clozapine use were themselves risk factors for increased mortality. However, we identified a strong association between being prescribed clozapine and lower mortality which persisted after controlling for a broad range of potential confounders including clinical monitoring and markers of disease severity (adjusted hazard ratio 0.4; 95% CI 0.2–0.7; p = .001). This association remained after restricting the sample to those with a diagnosis of schizophrenia or those taking antipsychotics and after using propensity scores to reduce the impact of confounding by indication. Among individuals with SMI, those prescribed clozapine had a reduced risk of mortality due to both natural and unnatural causes. We found no evidence to indicate that lower mortality associated with clozapine in SMI was due to increased clinical monitoring or confounding factors. This is the first study to report an association between clozapine and reduced risk of mortality from natural causes.