Objective: Functional remission represents an intermediate functional milestone toward recovery. Differential relationships of negative symptom sub-domains with functional remission in first-episode psychosis are understudied. We aimed to examine rate and predictors of functional remission in people with first-episode psychosis in the context of a 3-year follow-up of a randomized controlled trial comparing 1-year extension of early intervention (i.e. 3-year early intervention) with step-down psychiatric care (i.e. 2-year early intervention). Method: A total of 160 participants were recruited upon completion of a 2-year specialized early intervention program for first-episode psychosis in Hong Kong and underwent a 1-year randomized controlled trial comparing 1-year extended early intervention with step-down care. Participants were followed up and reassessed 3 years after inclusion to the trial (i.e. 3-year follow-up). Functional remission was operationalized as simultaneous fulfillment of attaining adequate functioning (measured by Social and Occupational Functioning Scale and Role Functioning Scale) at 3-year follow-up and sustained employment in the last 6 months of 3-year study period. Negative symptom measure was delineated into amotivation (i.e. motivational impairment) and diminished expression (i.e. reduced affect and speech output). Data analysis was based on 143 participants who completed follow-up functional assessments. Results: A total of 31 (21.7%) participants achieved functional remission status at 3-year follow-up. Multivariate regression analysis showed that lower levels of amotivation ( p = 0.010) and better functioning at study intake ( p = 0.004) independently predicted functional remission (Final model: Nagelkerke R² = 0.40, χ² = 42.9, p < 0.001). Extended early intervention, duration of untreated psychosis and diminished expression did not predict functional remission. Conclusion: Only approximately one-fifths of early psychosis patients were found to achieve functional remission. Functional impairment remains an unmet treatment need in the early stage of psychotic illness. Our results further suggest that amotivation may represent a critical therapeutic target for functional remission attainment in early psychosis.