Five close related substances (unknown impurities), four processes related (known impurities) substances were identified during the development of laboratory process and pilot scale preparation of an antipsychotic drug Iloperidone. Namely; Iloperidone related compound-1(I), Iloperidone related compound-2 (II), Iloperidone chalcone related dimer impurity (degraded) (III), Dehydro Iloperidone analogue (reductive impurity) (IV), Iloperidone process related compound-3 (hydrolyze impurity) (V), Iloperidone process related dimer impurity-14 (VI), Iloperidone process related dimer impurity-9 (VII), Iloperidone N-oxide impurity-11 (VIII), Iloperidone process related Desflouroanalogue of Iloperidone impurity-8 (IX). To the best of our knowledge, impurities I, II, III, IV and IX are not yet reported in the literature. An alternative synthetic protocol for Iloperidone and its impurities were designed and reported for the first time. All the synthesized compounds were characterized by using FTIR, MASS and NMR spectrometry. The detection, origin, synthesis, characterization and control of these potential related substances, thereby providing a commercial method to synthesize substantially pure Iloperidone was described in detail.