Individuals with schizophrenia experience problems in the perception of emotional material; however, the specificity, extent, and nature of the deficits are unclear. Facial affect and affective prosody recognition were examined in representative samples of individuals with first-episode psychosis, assessed as outpatients during the early recovery phase of illness, and non-patients. Perception tasks were selected to allow examination of emotion category results across face and voice modalities. Facial tasks were computerised modifications of the Feinberg et al. procedure (Feinberg, T.E., Rifkin, A., Schaffer, C., Walker, E., 1986. Arch. Gen. Psychiatry 43, 276--279). Prosody tasks were developed using four professional actors, and item selections were based on responses of undergraduates. Participant groups did not differ in their understanding of the words used to describe emotions. Findings supported small but consistent deficits in recognition of fear and sadness across both communication channels for the combined schizophrenia (n=29) and other psychotic disorders (n=28) groups as compared to the affective psychoses (n=23) and non-patients (n=24). A diagnostic effect was evident that was independent of the contribution of intelligence. The detection of emotion recognition impairments in first-episode schizophrenia suggests a trait deficit. The pattern of results is consistent with amygdala dysfunction in schizophrenia and related psychoses.