Despite maintenance treatment, including the prophylactic use of neuroleptics, there is a significant rate of psychotic relapse and rehospitalization in schizophrenic outpatients. Thus comprehensive aftercare should ideally include clinical strategies of early intervention designed to abort decompensations in their earliest stages before florid psychosis and rehospitalization occur. Factors likely to improve the success rate of such strategies include the presence of a phase of prodromal symptoms preceding florid psychosis during which interventions could be made, as well as the patient's insight at such times that he/she is becoming ill, which would facilitate cooperation with intervention. While there is considerable evidence that a prodromal phase is typically present, there has been little exploration of "early insight." This study examines two hypotheses about early insight: 1) insight is present in a sizable portion of schizophrenic patients in the early phase of relapse; and 2) such early insight predicts a successful resolution of the relapse on an outpatient basis without the need for rehospitalization. In a retrospective research design utilizing clinical progress notes, both hypotheses were corroborated. Of the 38 patients in the sample, 24 (63%) demonstrated early insight, and of these only two (8%) were hospitalized as a result of the relapse. Conversely, seven of 14 (50%) uninsightful patients required rehospitalization (p = .006). This supports the feasibility of an early intervention strategy and confirms that early insight is an important patient attribute that predicts successful implementation of this treatment. Clinical experience in trying to develop early insight in the context of a psychotherapeutic relationship and the implications of early intervention for reducing the overall exposure to neuroleptics in schizophrenic populations are discussed.