OBJECTIVE: To describe the longer-term clinical and functional outcome of a large, epidemiologic representative cohort of individuals experiencing a first episode of psychosis. METHOD: A naturalistic, prospective follow-up of an epidemiologic sample of 723 consecutive first-episode psychosis patients, followed between January 1998 and April 2005, at a median of 7.4 years after initial presentation to the Early Psychosis Prevention and Intervention Centre (EPPIC) in Melbourne, Australia. EPPIC is a frontline public mental health early psychosis program, servicing a geographically defined catchment area with a population of about 800,000 people. The main outcome measures included the Brief Psychiatric Rating Scale, the Schedule for the Assessment of Negative Symptoms, the Beck Depression Inventory, the Global Assessment of Functioning Scale, the Social and Occupational Functioning Assessment Scale, the Quality of Life Scale, and the remission criteria developed by the Remission in Schizophrenia Working Group. RESULTS: Follow-up information was collected on up to 90.0% (n = 651) of the baseline cohort of 723 participants, with 66.9% (n = 484) interviewed. In the last 2 years, 57% of individuals with schizophrenia/schizophreniform, 54% with schizoaffective disorder, 62% with affective psychosis, and 68% with other psychotic disorders reported some paid employment. Depending upon the criteria applied, symptomatic remission at follow-up was observed in 37%-59% of the cohort. Social/vocational recovery was observed in 31% of the cohort. Approximately a quarter achieved both symptomatic remission and social/vocational recovery. CONCLUSION: The relatively positive outcomes are consistent with a beneficial effect of specialized early intervention programs; however it is premature to draw firm conclusions. There was no control group and there are many differences between the relevant comparison studies and the present one. Although difficult to conduct, large scale controlled health services research trials are required to definitively determine the impact and optimal duration of specialized early psychosis programs.