The aim of the study was to analyze changes in functional adjustment from childhood to 2 years after the first episode of psychosis (FEP) in patients with early-onset schizophrenia spectrum disorders (SSD) and affective psychoses (AFP) and a good or intermediate level of premorbid adjustment. We followed 106 adolescents (aged 12-17 years) with FEP for 2 years after recruitment. Premorbid adjustment in childhood was assessed in 98 patients with the childhood subscale of the Cannon-Spoor Premorbid Adjustment Scale (c-PAS). Global functioning was assessed 2 years after the FEP with the Children's Global Assessment Scale (c-GAS) or the Global Assessment of Functioning scale (GAF), as appropriate. Functional deterioration was defined as a downward shift in the level of functional adjustment from childhood to 2 years after the FEP. In patients with good or intermediate premorbid adjustment, functional deterioration was observed in 28.2 % (26.5 % of the AFP group, 29.4 % of the SSD group). Longer duration of untreated psychosis (Beta = 0.01; P = 0.01) and higher symptom severity at the FEP, as measured with the Clinical Global Impression Scale (Beta = 1.12; P = 0.02), significantly predicted the presence of functional deterioration, accounting for 21.4 % of the variance. Irrespective of diagnosis (SSD or AFP), almost one-third of adolescents with FEP and good or intermediate premorbid adjustment showed functional deterioration from the premorbid period to 2 years after the FEP.