We have studied a total of 393 adolescents 14 to 19 years from Palau, where the lifetime morbid risk for broadly defined schizophrenia is 2.67% and cases cluster in large extended families. These Palauan adolescents included 52 offspring of a schizophrenic parent designated as "Genetically Highest Risk" or GHR+ and 61 nieces/nephews of affected sib-pairs/trios, designated "Genetically High Risk" or GHR. The remaining 280 subjects were recruited based on the results of a survey of Palauan high school students that was designed to screen for clinically HR and normal control adolescents with no close affected relatives. Among the selected high school students were 60 adolescents with one affected second or third degree relative who were designated as "Genetically Moderate Risk" (GMR). The remaining 220 subjects with no close affected relatives were designated as "Genetically Low Risk" (GLR). Based on a comprehensive clinical assessment using the K-SADS, we identified a total of 230 Palauan adolescents with early psychosis, 48 or 21% of whom had already transitioned to a DSM-IV psychotic disorder, predominantly schizophrenia. Together, the two highest genetic risk groups contributed 35% of the adolescent-onset DSM-IV psychosis cases and 26% of the prodromals. More than half of the early psychosis cases (55%) had no close affected relatives, indicating that genetic liability provides only a partial explanation of elevated risk. Our results support the value of screening for early psychosis in the high schools, conducting a full-scale clinical assessment to identify adolescents with early "prodromal" symptoms, and initiating a family-based intervention program designed to delay or even prevent the onset of florid psychosis. This intervention program comprises regular symptom reassessments so that referrals for treatment can be made as needed plus family psycho-education designed to engage the family in a program of care and support for the early psychosis patient.