The natural history of neurocognitive impairments in schizophrenia is unclear. We aimed to characterise this in an epidemiological first-episode cohort and relate it to long-term outcome. All but 1 of 112 first-episode psychosis cases ascertained from a geographical catchment area were traced at 10–12 years. Neurocognitive and multi-dimensional outcome assessments were made at interview in 49 cases with schizophrenia and related disorders. Twenty-four of these had completed the same neurocognitive battery at index admission. Comparisons with normative data showed impaired executive function in a proportion of the first episode (FE) sample at baseline. Significant deterioration was seen over the follow-up period in three of nine sub-tests: object assembly, picture completion and memory for designs. Neurocognitive impairments at outcome, but not baseline, correlated with clinical outcome. Poor outcome was associated with a decline in performance on visuo-spatial tasks and a failure to improve on frontal–temporal tasks during the follow-up period. Executive deficits may be present in the FE, but do not progress over 10–12 years. Visuo-spatial function is spared in the FE but may deteriorate over time. Changes in both these patterned deficits are predictive of clinical outcome.