In the first year of treatment after a FE of SCZ, 75% to 90% of patients achieve remission from psychotic symptoms. However, approximately 40% of FE patients are non-adherent to medication regimes and more than 60% have intermittent periods of gaps of non-adherence. Relapse rates are high with 82% of patients relapsing at least once within 5 years. Unfortunately even amongst those who do achieve full remission from psychotic symptoms, functional recovery remains a major challenge for patients. All the evidence suggests that individuals with SCZ do best with a combination of pharmacology and psychosocial intervention. Cognitive-behavior therapy (CBT) is gaining recognition as an effective treatment in SCZ and is in fact the only psychosocial treatment in SCZ with proven durability at short term follow-up. Although it is currently being used, the investigators need to learn more about the impact of CBT on FE SCZ especially as experts are advocating for CBT to be a critical component of FE clinical services.

The primary problem to be addressed is the incomplete functional recovery following a FE of SCZ and whether CBT is an effective treatment to aid this recovery. If CBT were to positively impact recovery in the FE we then need to address (i) which mechanisms are responsible for this improvement, and (ii) whether this treatment is effective for all FE patients.

Inclusion Criteria:

1. stabilized outpatients,
2. ages 16 to 35
3. meet DSM-IV criteria for: schizophrenia, schizophreniform disorder, brief psychotic disorder, delusional disorder, schizoaffective disorder, substance induced psychotic disorder, or psychotic disorder NOS. Participants who also meet DSM-IV criteria for substance abuse or dependence will not be excluded.
4. are competent and willing to give consent
5. are within 12 months of admission to the FEPP for a FE.

Exclusion:

1. serious risk of suicide or violence to others
2. a primary diagnosis of drug-induced psychosis or psychosis due to a general medical condition.