The symptoms of major psychotic illness are diverse and vary widely across individuals. Furthermore, the prepsychotic phase is indistinct, providing little indication of the precise pattern of symptoms that may subsequently emerge. Likewise, although in some individuals who have affected family members the occurrence of disease may be predicted, the specific symptom profile may not. An important question, therefore, is whether predictive physiological markers of symptom expression can be identified. We conducted a placebo-controlled, within-subjects study in healthy individuals to investigate whether individual variability in baseline physiology, as assessed using functional magnetic resonance imaging, predicted psychosis elicited by the psychotomimetic drug ketamine and whether physiological change under drug reproduced those reported in patients. Here we show that brain responses to cognitive task demands under placebo predict the expression of psychotic phenomena after drug administration. Frontothalamic responses to a working memory task were associated with the tendency of subjects to experience negative symptoms under ketamine. Bilateral frontal responses to an attention task were also predictive of negative symptoms. Frontotemporal activations during language processing tasks were predictive of thought disorder and auditory illusory experiences. A subpsychotic dose of ketamine administered during a second scanning session resulted in increased basal ganglia and thalamic activation during the working memory task, paralleling previous reports in patients with schizophrenia. These results demonstrate precise and predictive brain markers for individual profiles of vulnerability to drug-induced psychosis.