Objectives. To explore sensory gating deficits in subjects at Ultra High Risk (UHR) for psychosis before and after transition to a first psychotic episode. Methods. Sensory gating was assessed with the paired click paradigm in 61 UHR subjects, of whom 18 (30%) made a transition to psychosis (UHR + T) over a 3-year follow-up period and 28 matched healthy controls. Subjects were assessed at inclusion and again after approximately 18 months. P50, N100 (N1) and P200 (P2) sensory gating was established using the amplitude on the first (S1) and second (S2) click, the ratio- (S2/S1) and the difference score (S1-S2). Psychopathology was also assessed. Results. At baseline, UHR + T subjects presented smaller N1 difference scores compared to UHR + NT subjects and controls. The N1 difference score contributed modestly to the prediction of a first psychotic episode. Repeated measure analyses revealed smaller N1 and P2 S1 amplitudes, smaller P2 difference scores and larger P2 ratio's at follow-up compared to baseline in UHR + T subjects. Conclusion. The N1 difference score may be helpful in predicting a first psychosis. N1 and P2 sensory gating measures also showed alterations between the prodromal phase and the first psychosis, suggesting that these changes may relate to the onset of a frank psychotic episode.