Cognitive impairment is an important clinical feature in many individuals with schizophrenia. Factors associated with cognitive deficit are not well established. Duration of untreated psychosis (DUP) has recently gained interest as a prognostic factor in schizophrenia. This study reports on the association between DUP and cognitive function. Subjects comprised 42 individuals (30 males, 12 females) who experienced a first-episode of DSM-III-R schizophrenia or schizophreniform disorder. Cognitive function was determined at clinical stabilization using the WAIS-R. An estimate of cognitive deterioration was based on the WAIS-R subtest profile. Longer DUP, male gender, higher premorbid IQ and younger age at admission independently predicted cognitive deterioration. Poorer performance on Digit Symbol and Comprehension subtests was associated with longer DUP. The findings suggest that untreated psychosis compromises some aspects of cognitive function. Studies investigating the association between DUP and outcome should control for potentially confounding variables. Early treatment of psychosis could help to reduce the prominent cognitive deficit in first-episode schizophrenia.