Adolescents and young adults who experience the onset of a psychotic disorder often demonstrate major disruptions in occupational and social functioning. Yet, certain persons appear to be at a greater risk for impaired functioning after an episode of psychosis than others. This review of the psychiatric research literature on outcomes in psychotic disorders identifies several variables predictive of occupational and social functioning among young persons with both affective and nonaffective psychoses. Variables predictive of functional outcomes include diagnosis, symptom severity, duration of onset of symptoms, age of onset of symptoms, gender, stressful life events, premorbid functioning, and social supports. A model for conceptualizing the relationships of these variables to functioning is presented, and the implications for occupational therapy practice and research are discussed.