INTRODUCTION:People with schizophrenia have neurocognitive as well as social cognition deficits. Numerous studies have shown impairment in these domains in patients with chronic schizophrenia. However, these disturbances during the early phase of the disease have been less studied. OBJECTIVE:The aim of the study is to explore the Theory of Mind and emotional processing in first-episode patients, compared to healthy subjects. METHOD:40 patients with a first psychotic episode of less than 5 years' duration, and 40 healthy control subjects matched by age and years of schooling were assessed. The measures of social cognition included 4 stories of false belief, the Reading the Mind in the Eyes Test (RMET) and the Pictures of Facial Affect (POFA) series. RESULTS:The patients with a first psychotic episode performed significantly worse in all tasks of social cognition, compared to the healthy controls. The second-order ToM was impaired whereas the first-order ToM was preserved in the patients. Happiness was the emotion most easily identified by both patients and controls. Fear was most difficult for the patients, while for the controls it was disgust. CONCLUSIONS:Deficits in ToM and emotional processing are present in patients with a first psychotic episode.