A dysregulation of the hypothalamus-pituitary-adrenal (HPA) axis has been suggested as a factor in the etiology and exacerbation of psychosis, but has not been reported consistently. Sex differences are apparent in many aspects of psychotic disorders and may explain some of the equivocation associated with the regulation of the HPA axis in the illness. The present study compared the cortisol response to awakening (CRA) in 27 patients (16 men and 11 women) with recent onset of psychosis (within the past 2 years) and 40 age and gender matched controls. Within the patient group, we also assessed the relationship between the CRA and positive and negative symptoms of psychosis, anxiety and depression. The CRA in patients was not significantly different from controls. However, within the patient group, we observed a significant sex difference, with a blunted cortisol response to awakening in men but not in women (F=7.26; p<0.002). This difference could not be explained by differences between male and female patients in awakening time, medication, or diagnosis of schizophrenia vs. affective psychosis. Cortisol levels were not related to symptom measures. Our findings demonstrate a dysregulation of the HPA axis in male patients with recent onset of psychosis. This sex specificity might be related to and explain in part the unfavorable course of the illness observed in men.