Background and aim Little is known about the relationship between neurocognitive performance and functional outcome before the onset of frank psychosis. This longitudinal study aimed to investigate neurocognitive predictors of poor functional outcome in a group identified as ultra-high risk (UHR) for psychosis between two and 13years prior. Method Individuals (N =230) identified as UHR for psychosis at the PACE Clinic in Melbourne completed assessment of psychopathology, functioning and neurocognition at baseline and follow-up. The mean length of follow-up was 7.26years (SD 3.05). Results Forty-one individuals with the poorest functional outcome were identified. Only 48.8% of this group had transitioned to psychosis. Poor functional outcome was associated with reduced performance at baseline in the specific neurocognitive domains of verbal learning and memory, processing speed and attention, and verbal fluency, but not global cognitive impairment. Reduced performance on a verbal story recall task, in combination with higher negative symptoms at baseline, was the best predictor of later poor outcome. Baseline positive psychotic symptoms and GAF scores were not associated with later poor outcome. Discussion To date, this is the longest follow-up study of an UHR sample. Poor functional outcome was associated with specific neurocognitive decrements, regardless of transition to psychosis. The detection of individuals with poor functioning at follow-up, against a background of previously identified risk factors for psychotic disorder, may yield a valid group in which to study biomarkers and treatment of schizophrenia.