OBJECTIVE Investigating the relationship between premorbid and prodromal status and the clinical manifestations of the first psychotic episode is relevant for understanding the pathophysiology of psychosis and for improving management of the disease. This study examined patterns of premorbid functioning of persons interviewed during their first episode of psychotic illness and examined the relationship of premorbid characteristics with symptom severity and cognitive functioning during the first illness episode. METHODS The data were derived from the baseline assessments of a multicenter international drug trial that enrolled 535 patients in their first episode of psychosis. Subjects' scores on the Premorbid Adjustment Scale were used to assign them to groups according to whether their premorbid functioning was stable-good, stable-poor, or deteriorating. The three groups' scores on the Positive and Negative Syndrome Scale, Clinical Global Impression (CGI) severity scale, and a cognitive battery were compared. RESULTS Almost half of the patients (47.5%) had stable-good premorbid functioning, 37.3% had stable-poor premorbid functioning, and 15.1% had initially good, but later deteriorating, premorbid functioning. Compared to the stable-poor and deteriorating groups, the stable-good group had lower (better) negative syndrome and general psychopathology scores on the Positive and Negative Syndrome Scale and a lower CGI severity scale score. Differences between the stable-poor and stable-good groups were also found on some cognitive measures and on the positive syndrome subscale of the Positive and Negative Syndrome Scale. CONCLUSIONS More than half of the subjects, who were interviewed during their first episode of psychotic disorder, had evident premorbid behavioral disturbances. Poor premorbid functioning before onset of psychosis was associated with more severe symptoms and more severe cognitive manifestations of illness during the first illness episode.