Objective Adult first-degree relatives of persons with schizophrenia carry elevated genetic risk for the illness, demonstrate working memory (WM) impairments, and manifest alterations in dorsolateral prefrontal cortical (DLPFC) function during WM. Because substantially less is known about these phenotypes in adolescent subjects we sought to demonstrate that young relatives of persons with schizophrenia manifest impaired WM and altered prefrontal activation. Methods Participants were 21 non-psychotic, unmedicated first-degree relatives of persons with a DSM-IV diagnosis of schizophrenia or schizoaffective disorder, depressed type and 24 unmedicated controls, recruited from the community and hospitals in metropolitan Boston (ages 13–28). We compared groups on an auditory WM task with interference prior to scanning and used functional magnetic resonance imaging (fMRI) to compare groups while performing visual 2-back WM and control vigilance tasks. Blood oxygen level dependent signal change was measured using two whole-brain gradient echo EPI pulse acquisitions (21 contiguous, 5mm axial slices), acquired on a Siemens 1.5T MR scanner. Data were analyzed using Statistical Parametric Mapping-99. Results The high risk subjects were significantly impaired on the auditory WM task, had significantly greater Phobic Anxiety, and marginally greater Psychoticism than controls on the Symptom Checklist-90-Revised, and showed significantly greater task-elicited activation in the right DLPFC (BA 46). Psychopathology, IQ, and in-scanner WM performance did not account for group differences in brain activation. Conclusions Data support a physiological difference (an exaggerated fMRI response) in DLPFC in adolescents at genetic risk for schizophrenia, independent of psychosis. Future work can study the relationship of these measures to possible onset of schizophrenia.