Despite consensus that schizophrenia is a neurodevelopmental disorder characterized by cognitive deficits, objective data documenting the course of cognitive development remain sparse. We conducted a follow-back study of patients ascertained at the time of their initial episode of schizophrenia or schizoaffective disorder, and a group of demographically matched healthy volunteers. We obtained school records containing standardized achievement test scores from the 1st through 12th grades, and scholastic aptitude test results from the 11th and 12th grades, and examined the developmental trajectories of cognitive performance with respect to prospective examinations conducted following participants' enrollment in our study. We found significant differences in academic achievement tests as early as the first grade, with scores from participants who would later develop schizophrenia lagging behind their peers by 0.8 to 1.1 grade equivalents. This gap widened resulting in a difference between groups of 1.5 to 1.8 grade equivalents by the 12th grade. In the subset of patients for whom SAT scores were available, we found that WAIS-R Full Scale IQ was 11.5 points lower than predicted from earlier SAT scores, suggesting a substantial decline in cognitive ability accompanying the initial episode of illness. These findings suggest that schizophrenia is marked by substantial cognitive deficits in the first grade, that there may be additional subtle decline preceding the overt onset of psychotic symptoms, and that the initial episode of illness is marked by additional decline. These observations may help advance concepts of premorbid cognitive ability in the schizophrenia syndrome and constrain models of pathophysiology.