The severity and profile of cognitive dysfunction in first episode schizophrenia and psychotic affective disorders were compared before and after antipsychotic treatment. Parallel recruitment of consecutively admitted study-eligible first-episode psychotic patients (30 schizophrenia, 22 bipolar with psychosis, and 21 psychotic depression) reduced confounds of acute and chronic disease/medication effects as well as differential treatment and course. Patient groups completed a neuropsychological battery and were demographically similar to healthy controls (n =41) studied in parallel. Prior to treatment, schizophrenia patients displayed significant deficits in all cognitive domains. The two psychotic affective groups were also impaired overall, generally performing intermediate between the schizophrenia and healthy comparison groups. No profile differences in neuropsychological deficits were observed across patient groups. Following 6 weeks of treatment, no patient group improved more than practice effects seen in healthy individuals, and level of performance improvement was similar for affective psychosis and schizophrenia groups. Although less severe in psychotic affective disorders, similar profiles of generalized neuropsychological deficits were observed across patient groups. Recovery of cognitive function after clinical stabilization was similar in mood disorders and schizophrenia. To the extent that these findings are generalizable, neuropsychological deficits in psychotic affective disorders, like schizophrenia, may be trait-like deficits with persistent functional implications.