The first psychotic episode is an important period for prevention of cognitive and social deterioration in schizophrenia. Cognitive deficits are of particular interest since they are evident even before a proper diagnosis can be made. Interestingly, there is a relation between cognitive deficits and social functioning. Here, we investigated the changes in cognitive and social functioning during one year and determined also the association of social functioning with cognitive impairments and psychopathological symptoms in first episode patients. 32 patients with a first psychotic episode and 32 healthy controls were investigated. Cognitive functions such as visual perception, executive functions, sustained attention, were tested with visual backward masking (VBM), the Wisconsin Card Sorting Test (WCST), and the Continuous Performance Test (CPT). Follow up tests were carried out after 6 and 12 months. Social functioning of the patients was evaluated by Health and Outcome Scale (HoNOS). Cognitive functions of patients were impaired compared to the healthy controls in all 3 tests. Performance in the cognitive tests did not change significantly during the year. Treatment compliance, however, improved social and symptom indicators.