Abstract Background We aimed to identify unmet treatment needs for improving social and occupational functioning in early schizophrenia using a data-driven causal discovery analysis. Methods Demographic, clinical, and psychosocial measures were obtained for 276 participants from the Recovery After an Initial Schizophrenia Episode Early Treatment Program (RAISE-ETP) trial at baseline and 6-months, along with measures of social and occupational functioning from the Quality of Life Scale. The Greedy Fast Causal Inference algorithm was used to learn a partial ancestral graph modeling causal relationships across baseline variables and 6-month functioning. Effect sizes were estimated using a structural equation model. Results were validated in an independent dataset (N = 187). Results In the data-generated model, greater baseline socio-affective capacity was a cause of greater baseline motivation [Effect size (ES) = 0.77], and motivation was a cause of greater baseline social and occupational functioning (ES = 1.5 and 0.96, respectively), which in turn were causes of their own 6-month outcomes. Six-month motivation was also identified as a cause of occupational functioning (ES = 0.92). Cognitive impairment and duration of untreated psychosis were not direct causes of functioning at either timepoint. The graph for the validation dataset was less determinate, but otherwise supported the findings. Conclusions In our data-generated model, baseline socio-affective capacity and motivation are the most direct causes of occupational and social functioning 6 months after entering treatment in early schizophrenia. These findings indicate that socio-affective abilities and motivation are specific high-impact treatment needs that must be addressed in order to promote optimal social and occupational recovery.