Functional measures have consistently shown prefrontal abnormalities in schizophrenia. However, structural magnetic resonance imaging (MRI) findings of prefrontal volume reduction have been less consistent. In this study, we evaluated prefrontal gray matter volume in first episode (first hospitalized) patients diagnosed with schizophrenia, compared with first episode patients diagnosed with affective psychosis and normal comparison subjects, to determine the presence in and specificity of prefrontal abnormalities to schizophrenia. Prefrontal gray and white matter volumes were measured from first episode patients with schizophrenia (n = 17), and from genderand parental socio-economic status-matched subjects with affective (mainly manic) psychosis (n = 17) and normal comparison subjects (n = 17), age-matched within a narrow age range (18–29 years). Total (left and right) prefrontal gray matter volume was significantly reduced in first episode schizophrenia compared with first episode affective psychosis and comparison subjects. Follow-up analyses indicated significant left prefrontal gray matter volume reduction and trend level reduction on the right. Schizophrenia patients showed 9.2% reduction on the left and 7.7% reduction on the right compared with comparison subjects. White matter volumes did not differ among groups. These data suggest that prefrontal cortical gray matter volume reduction is selectively present at first hospitalization in schizophrenia but not affective psychosis.