Childhood interpersonal trauma (CIT) and premorbid adjustment are both associated with poor outcome in psychosis. In this study we investigate the relative impact of CIT and premorbid adjustment on symptom remission in first episode psychosis (FEP) over two years. A total of 232 participants with FEP were recruited through the early detection program of the The early detection and Intervention in Psychosis (TIPS)-2 study and followed up after two years. Symptom remission was according to consensus criteria. CIT was assessed with the semi-structured interview Freyd Goldberg Brief Betrayal Trauma Survey, and premorbid adjustment with the Premorbid Adjustment Scale. Generalized estimating equations and multivariate models were used to analyze the associations between remission, symptom levels over time, CIT and premorbid adjustment; and a path analysis of mediation effects of CIT through premorbid adjustment on remission. In this sample with 57% males and a mean age of 26.6 years (SD 10.2), a third of participants had experienced CIT. The participants with CIT had poorer premorbid adjustment compared to those without. Statistical analyses found independent effects of CIT and an interaction effect of CIT with premorbid adjustment on remission after two years, suggesting that CIT moderates the effect of premorbid adjustment. However contrary to expectations, premorbid adjustment did not mediate the effect of CIT. Our findings indicate a complex interplay between effects of interpersonal trauma and premorbid social adjustment on remission in psychosis. CIT appeared to moderate the effect of premorbid adjustment such that individuals with CIT and who had poor social functioning in childhood are at greater risk of non-remission. Findings indicate that better premorbid social relations could provide a buffer for the effects of trauma on symptom course.