Background Studies conducted in high-income countries have reported significant cognitive deficits in first on set schizophrenia subjects relative to asymptotic controls, and it has been suggested that the severity of such deficits could be directly related to the duration of untreated psychosis (DUP). It is relevant to conduct similar studies in developing countries, given the supposedly better outcome for schizophrenia patients living in the latter environments. Methods We applied verbal fluency and digit span tests to an epidemiological-based series of patients with first-onset psychoses (n =179) recruited in the city of São Paulo, and compared the findings with those from non-psychotic control subjects randomly selected from the same geographical areas (n =383). Results Psychosis subjects showed lower scores on the three tests relative to controls, with greatest between-group differences for the backward digit span task (p <0.0001). There were no significant differences between subjects with affective and schizophreniform psychosis. Cognitive performance indices were negatively correlated with the severity of negative symptoms, but showed no relation to DUP. Conclusion We found significant cognitive deficits in patients investigated early during the course of psychotic disorders in an environment that is distinct from those where the subjects investigated in previous studies have been drawn from. We found no support to the hypothesis of an association between greater cognitive deficits and a longer DUP.