The aim of this study was to identify the predictors of outcome at one year follow-up after the first psychotic episode of schizophrenia. Seventy-nine first-episode schizophrenia patients were assessed monthly with the Brief Psychiatric Rating Scale (BPRS), Scale for Assessment of Positive Symptoms (SAPS), and Scale for Assessment of Negative Symptoms (SANS) after discharge from their first hospitalization. Outcome measures were presence of relapse and rehospitalization, level of global functioning, employment status and severity of symptoms at one year. A total of 33% of the patients had a relapse, and 12.1% were rehospitalized during one year follow-up. Premorbid childhood functionality was worse in patients who had relapse, but there was no correlation between premorbid adjustment scores and BPRS, SANS and SAPS scores at one year. There was no difference in duration of untreated psychosis (DUP) between patients who had relapse and not; however, the patients who had double relapse, had longer DUP than those without relapse. The time period between discharge and rehospitalization was shorter in patients with longer DUP. Functionality in childhood and noncompliance to the treatment independently contributed to the relapse rate. Functionality in late adolescence independently contributed to the Global Assessment of Functioning (GAF) scale score at one year and the GAF score at discharge appeared as a predictor of employment. The results of the present study suggest that treatment compliance and early premorbid adjustment level seem to be important predictors of relapse rate in first episode schizophrenia.