Although most studies find low socioeconomic status (SES) to be associated with prevalence of schizophrenia, incidence studies do not generally support this, and some even report an inverse association. The objective of the current historical prospective study was to examine the relationship between SES, cognitive functioning, and risk of hospitalization for schizophrenia in a population-based sample of Israeli adolescents. Subjects were 811 487 adolescents, assessed by the Israeli military draft board for socio-demographic factors and cognitive functioning. Data on later hospitalization for schizophrenia were obtained from a population-based hospitalization registry. Findings indicated that when simply examining SES and schizophrenia, lower SES was associated with greater risk of hospitalization for schizophrenia (Hazard Ratio [HR] = 1.193, 95% CI = 1.091-1.303). When dividing the cohort into low, average, and high cognitive functioning, SES did not influence the risk for schizophrenia among individuals with high and average cognitive functioning, whereas among individuals with low cognitive functioning, high SES was found to slightly increase the risk for schizophrenia (HR = 1.21, 95% CI = 1.03-1.42). One possible explanation for this finding might be that among individuals from low socioeconomic backgrounds, low IQ may reflect decreased opportunities related to SES, whereas among individuals from high SES backgrounds, low IQ might reflect risk for later psychopathology.