Neuropsychological impairment is ubiquitous in schizophrenia even at the first presentation of psychotic symptoms. We sought to elucidate the nature of the neuropsychological profile at the onset of the illness by examining the neuropsychological functioning of 40 patients experiencing their first episode of psychosis and 22 matched controls. All participants completed a battery of neuropsychological tasks designed to assess attention, verbal learning/memory, non-verbal memory, spatial ability, psychomotor speed, and executive function. First-episode patients showed significant impairment on tasks of executive function, including those requiring the ability to form and initiate a strategy, to inhibit prepotent responses, and to shift cognitive set, and also on tasks of verbal fluency. Memory impairments were seen on verbal learning and delayed non-verbal memory only. Impairment on tasks of psychomotor speed suggests that there may be a significant amount of cognitive slowing even at the first onset of psychosis. We suggest that our patients may be experiencing difficulty in specific aspects of executive functions, including the ability to form and execute a strategy, and these difficulties may be mediating the deficits observed on tasks of verbal learning.