Growing up in an urban area has been shown to be associated with an increased risk of psychotic disorder in later life. While it is commonly held that a only a tiny fraction of exposed individuals will develop schizophrenia, recent evidence suggests that expression of psychosis in exposed individuals may be much more common, albeit at attenuated levels. Findings are based on a population sample of 2548 adolescents and young adults aged originally 14-24 years, and followed up over almost 5 years up to ages 17-28 years. Trained psychologists assessed all these subjects with the core psychosis sections on delusions and hallucinations of the Munich-Composite International Diagnostic Interview. Growing up in an urban area was associated with an increased risk of expression of psychosis in the adolescents and young adults (adjusted OR 1.31, 95% CI 1.03-1.66). The proxy environmental risk factor that urbanicity represents may shift a relatively large section of the adolescent population along a continuum of expression of psychosis. Other causal influences may be required to make the transition to schizophrenia in adult life.