It has been proposed that the onset of schizophrenia creates a social network crisis, resulting in a dramatic deterioration of social resources during the period immediately following a first hospitalization from essentially normal pre-hospitalization levels. To evaluate this proposal, recent onset patients (n = 89) completed comprehensive assessments that examined their social networks in the 12 months prior to first hospitalization and, in a subset of patients (n = 34), at a 15-month follow-up. Cross-sectional relationships to social functioning and symptoms were examined at both time points. Compared to existing research, at the initial assessment patients were characterized by several network disturbances, including small network size, a high proportion of family members, and highly dense interconnections among network members; these disturbances generally remained moderately to highly stable at follow-up. Smaller social networks were related to poor current and premorbid social functioning and aspects of clinical functioning, particularly at the 15-month follow-up assessment. Thus, this first repeated assessment of social network characteristics in the early course of schizophrenia does not support the social network crisis concept. Instead, results suggest that functionally relevant social network disturbances often exist by the time of first hospitalization in schizophrenia.