AIM:: Examine substance misuse over the first 18 months of first-episode psychosis treatment. METHOD:: Clinicians rated alcohol and drug (mostly cannabis) misuse for 243 individuals followed prospectively. Assessments were completed at baseline and after 3, 6 and 18 months. Interventions relating to substance misuse included ongoing assessment of use, education and counselling to avoid. RESULTS:: Alcohol and drug misuse declined significantly between baseline and 3 months, especially among patients with a substance abuse or dependence diagnosis at baseline. Overall, these reductions were maintained over the 18-month follow-up period. The exception was worsening alcohol misuse over time among patients with alcohol abuse or dependence on entry. CONCLUSIONS:: With good usual care, education and support, alcohol and drug misuse declined significantly during the first months of psychosis treatment. The improvements in drug misuse were generally maintained over the 18-month follow-up, and worsening alcohol misuse over time may be the greater issue.