BACKGROUND: There is interest in the possibility of indicated prevention of psychosis. There is a strong case for using psychological approaches to prevent transition to psychosis in high-risk patients. AIMS: To identify individuals at high risk of transition to psychosis, and psychological characteristics relevant to the development of psychosis in this group. METHOD: The design of a randomised controlled trial of cognitive therapy for the prevention of psychosis in people at high risk (meeting operational criteria of brief or attenuated psychotic symptoms, or first-degree family history with functional decline) is outlined. The first patients recruited are compared with non-patient samples on cognitive and personality factors; an interim analysis of transition rate is reported. RESULTS: Cases (n = 31) were recruited mainly from primary care. Of the 23 high-risk patients monitored for 6-12 months, 5 (22%) made the transition to psychosis. The high-risk group scored significantly higher than non-patients on measures of schizotypy, metacognitive beliefs and dysfunctional self-schemas (sociotropy). CONCLUSIONS: The findings validate the methods of identifying individuals at high risk of experiencing a psychotic episode. Compared with non-patient controls, the cases showed dysfunctional metacognitive beliefs and self-schemas.