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BACKGROUND: We examined the course of illness over a 12-month period in a large, international multi-center cohort of people with a first-episode schizophrenia spectrum disorder (FES) in a naturalistic, prospective study (PSYSCAN). METHOD: Patients with a first episode of schizophrenia, schizoaffective disorder (depressive type) or schizophreniform disorder were recruited at 16 institutions in Europe, Israel and Australia. Participants (N = 304) received clinical treatment as usual throughout the study. RESULTS: The mean age of the cohort was 24.3 years (SD = 5.6), and 67 % were male. At baseline, participants presented with a range of intensities of psychotic symptoms, 80 % were taking antipsychotic medication, 68 % were receiving psychological treatment, with 46.5 % in symptomatic remission. The mean duration of untreated psychosis was 6.2 months (SD = 17.0). After one year, 67 % were in symptomatic remission and 61 % were in functional remission, but 31 % had been readmitted to hospital at some time after baseline. In the cohort as a whole, depressive symptoms remained stable over the follow-up period. In patients with a current depressive episode at baseline, depressive symptoms slightly improved. Alcohol, tobacco and cannabis were the most commonly used substances, with daily users of cannabis ranging between 9 and 11 % throughout the follow-up period. CONCLUSIONS: This study provides valuable insight into the early course of a broad range of clinical and functional aspects of illness in FES patients in routine clinical practice.