A body of evidence suggests that exposure to psychosocial stressors and stress sensitivity are involved in psychosis pathogenesis. However, little is known about the temporal course of these domains in those with psychosis-risk syndromes. Furthermore, to date, there have been no studies examining associations between psychosocial stressors and impaired stress tolerance, or how these factors might be implicated in symptom progression prior to psychosis onset. A total of 73 clinical high-risk (CHR) participants and 78 healthy controls (HCs) completed baseline measures of life event (LE) exposure and impaired stress tolerance. Additionally, 54 CHR and 57 HC participants returned to complete the same procedures at a 12-month follow-up assessment. Results indicated that when compared to HCs, CHR individuals exhibited increased LE exposure and impaired stress tolerance at baseline. Longitudinal analyses compared subgroups of CHR participants who exhibited positive symptoms worsening over the 1-year course (CHR-Prog), improved or steady (CHR-Remiss/Persist), and HCs. CHR-Prog individuals showed consistently elevated independent LEs exposure while CHR-Remiss/Persist reported a decline and HCs a steady low level across time. Furthermore, CHR-Prog exhibited increased stress intolerance, while the CHR-Remiss/Persist improved and HCs displayed consistently low levels over time. Analyses examining interrelationships between these domains showed a trend level interaction effect predicting follow-up symptoms. Taken together, results from the present study indicate an important role for exposure to stressors and increasing stress intolerance during psychosis pathogenesis. Additionally, findings indicating that decreases in stress exposure may lead to more favorable outcomes provide a promising target for novel targeted interventions.