Abstract Background While adolescent-onset schizophrenia (ADO-SCZ) and adolescent-onset bipolar disorder with psychosis (psychotic ADO-BPD) present a more severe clinical course than their adult forms, their pathophysiology is poorly understood. Here, we study potentially state- and trait-related white matter diffusion-weighted magnetic resonance imaging (dMRI) abnormalities along the adolescent-onset psychosis continuum to address this need. Methods Forty-eight individuals with ADO-SCZ (20 female/28 male), 15 individuals with psychotic ADO-BPD (7 female/8 male), and 35 healthy controls (HCs, 18 female/17 male) underwent dMRI and clinical assessments. Maps of extracellular free-water (FW) and fractional anisotropy of cellular tissue (FA_T) were compared between individuals with psychosis and HCs using tract-based spatial statistics and FSL's Randomise. FA_T and FW values were extracted, averaged across all voxels that demonstrated group differences, and then utilized to test for the influence of age, medication, age of onset, duration of illness, symptom severity, and intelligence. Results Individuals with adolescent-onset psychosis exhibited pronounced FW and FA_T abnormalities compared to HCs. FA_T reductions were spatially more widespread in ADO-SCZ. FW increases, however, were only present in psychotic ADO-BPD. In HCs, but not in individuals with adolescent-onset psychosis, FA_T was positively related to age. Conclusions We observe evidence for cellular (FA_T) and extracellular (FW) white matter abnormalities in adolescent-onset psychosis. Although cellular white matter abnormalities were more prominent in ADO-SCZ, such alterations may reflect a shared trait, i.e. neurodevelopmental pathology, present across the psychosis spectrum. Extracellular abnormalities were evident in psychotic ADO-BPD, potentially indicating a more dynamic, state-dependent brain reaction to psychosis.