Symptomatic and functional outcome and cognitive functioning were examined in adolescents experiencing their first episode of psychosis. The adolescents (n=69) were assessed and compared with adults (n=69), all presenting for treatment for the first time to a specialized Early Psychosis Program. Assessments were conducted at the initial presentation, and at 1- and 2-year follow-ups. Assessments included positive and negative symptoms, depression, number of relapses, substance use, cognitive functioning, age-appropriate productivity (employment or being in school) and quality of life. Adolescents showed both symptomatic and functional improvement over 2 years of optimal treatment. Positive and negative symptoms predicted outcome at 2 years. Compared with adults, the adolescents had similar clinical and functional outcomes but used more cannabis and had an increased number of relapses. These adolescents are doing relatively well following their first episode and reinforce the need to address cannabis use as an integral part of a comprehensive treatment program.