BACKGROUND The Early Psychosis Prevention and Intervention Centre (EPPIC) commenced operation in Melbourne, Australia, in 1992. It offers a model for management of first-episode psychosis, utilising principles of early detection, low-dose medication and comprehensive psychosocial interventions within the least restrictive setting. METHODS Data were examined from the first three months of treatment for all consecutive people with first-episode psychosis (n = 231) accepted in the programme in 1995-1996. A subsample of patients (n = 120) was assessed comparing clinical ratings with variables of gender, diagnosis, hospitalisation, and medication. RESULTS Hospitalisations were brief, and avoided for a third of the people. Low-dose antipsychotic medication was maintained in both in-patient and community settings. Those people with manic psychosis were more likely to be hospitalised. Hospitalised people received higher antipsychotic dosages, and had a greater rate of reduction in Brief Psychiatric Rating Scale psychotic subscale scores at three months follow-up. Eighty per cent of a representative subsample had responded to treatment and 63% were in remission by the end of the three months. CONCLUSIONS This naturalistic study suggests that the feasibility of implementing the EPPIC model in a range of clinical settings is promising and applicable in practice.