Schizophrenia is a severe mental illness characterised by abnormalities of thought and perception that affects 1-2% of the population. Patients who experience a first episode of schizophrenia should be treated early and optimally with antipsychotic agents to lessen the morbidity of the initial episode and possibly improve the course of the illness. Positive psychotic symptoms remit in the majority of patients who are treated with adequate trials of antipsychotic medications, but most relapse within 1 year. Non-adherence is strongly related to the likelihood of recurrence of symptoms. Innovative programmes that integrate early intervention, psychosocial treatments and atypical antipsychotic pharmacotherapy show promise in improving outcomes. The available research supports the use of antipsychotic medications early in the first-episode of schizophrenia and for at least 1 year after remission of positive symptoms. Antidepressants, benzodiazepines and mood stabilisers have roles in the acute and maintenance phases of treatment for some patients. Atypical antipsychotics represent a great advance in the treatment of first-episode schizophrenia with strong evidence for greater tolerability with equal or better therapeutic efficacy. Future research will further define their roles in treatment and hopefully identify targets for prevention of first-episode schizophrenia.