We have hypothesized that the clinical deterioration observed in the early stage of schizophrenia is due to a process of limited neurodegeneration that begins in the prodromal phase and is associated with the persistence of positive and negative symptoms. In our prior study we have demonstrated the clinical progression of the illness in first episode patients over a four-year period. Preliminary volumetric MRI data from that study and from several other groups support this hypothesis but are inconsistent and inconclusive. Moreover, despite the numerous cross-sectional 'H-MRS studies of decreased NAA in temporal and frontal cortices in schizophrenia, there have been no longitudinal 'H-MRS studies. Therefore, the proposed study will utilize high resolution magnetic resonance imaging, combining MRJ and MRS in a longitudinal study with repeated measurements to determine whether the clinical progression seen in patients will be reflected by changes in brain morphology and NAA. Specifically, we predict that the progression of brain pathology seen in changes in MRI and MRS measures between baseline and end point assessments (decreasing volumes of cortical gray matter, decreasing hippocampus, increasing lateral and third ventricles and increasing subarachnoid space and decreasing lH-NAA in mesiotemporal and prefrontal cortical regions and thalamic nuclei) will be observed in a subgroup of patients with poor clinical outcomes reflected by recurrent or persistent psychopathology and functional impairment and who exhibit the greatest clinical deterioration during the scanning intervals. We also will examine trealment effects in terms of whether it prevents pathological progression in patients or introduces artifactual effects (such as in the basal ganglia). Finally, we will determine whether there are structural or metabolic abnormalities that are present at the first episode of schizophrenia which predict long-term clinical outcome. We hypothesize that MRI measures of more severe brain pathology at study entry (as reflected by greater lateral and third ventricles volumes, reduced cortical gray matter, and reduced NAA concentration in the frontal and mesiotemporal lobes and the thalamic nuclei) will be associated with poorer long term treatment outcome. We also hypothesize that treatment will be associated with preservation of brain volume in these brain regions and preservation or enhancement of NAA concentration in the frontal and temporal lobes. To test our hypotheses we will prospectively examine 100 patients ascertained in their first episode of schizophrenia using high resolution MR and spectroscopic imaging over a three-year period. Treatment will be standardized using an open label clinical treatment algorithm that provides optimal treatment with atypical antipsychotic drugs. Patients will be assessed for psychopathology, social and work performance and with MRI and MRS at study entry and at six months, eighteen months and three year of follow-up. MRI data will be analyzed using segmentation methods to determine the volume of specific regions of interest. NAA will be determined by quantitation of NAA, Cr and NAAJCr. This study will provide important information about the clinical and neuropathological course of subgroups of schizophrenia and therapeutic strategies for early identification and intervention.