Patients with first-episode schizophrenia show significant cognitive impairments even at this early phase of their illness. Antipsychotic medication improves clinical symptomatology, but the effectiveness of this treatment on neuropsychological deficits remains unclear. We investigated clinical symptom and neuropsychological performance change in 34 unmedicated first-episode psychotic patients (17 males, 17 females) from the time prior to treatment until 33.6+/-11.3 days after treatment initiation at which time patients demonstrated meaningful recovery from psychosis. Twenty-four matched healthy subjects were also studied. Performance in most neuropsychological functions (language skills, attention, nonverbal learning and reasoning, motor speed) remained stable for the group as a whole. However, reduction in negative symptoms was significantly correlated with performance increases in verbal fluency and attention. Higher negative symptom recovery was associated with improvement of cognitive performance to levels approaching those of healthy subjects, whereas low or no negative symptom improvement was associated with stable or decreased cognitive performance. Reduction in positive symptoms was not associated with change in cognitive abilities. These findings suggest a linkage between early, treatment-induced improvements in negative symptoms and reductions in distinct cognitive deficits.