A number of lines of evidence converge in implicating neurodevelopmental processes in the etiology and epigenesis of schizophrenia. In this study we used a prospective, longitudinal design to examine whether adverse obstetric experiences predict schizophrenia and whether there is a deviant functional-developmental trajectory during the first 7 years of life among individuals who manifest schizophrenia as adults. The 9,236 members of the Philadelphia cohort of the National Collaborative Perinatal Project were screened for mental health service utilization in adulthood, and chart reviews were performed to establish diagnoses according to DSM-IV criteria. The risk for schizophrenia increased linearly with the number of hypoxia-associated obstetric complications but was unrelated to maternal infection during pregnancy or fetal growth retardation. Preschizophrenic cases (and their unaffected siblings who were also cohort members) manifested cognitive impairment, abnormal involuntary movements and coordination deficits, and poor social adjustment during childhood. There was no evidence of intraindividual decline in any domain, but preschizophrenic cases did show deviance on an increasing number of functional indicators with age. Together, these findings suggest that both genetic and obstetric factors participate in creating a neural diathesis to schizophrenia, the phenotypic expressions of which are age dependent, probably reflecting the maturational status of a number of interconnected brain systems.