Sixty-two patients who had been treated for three years in an ad-hoc, assertive treatment team for patients who had suffered a first psychotic episode were compared to sixty-two patients who had been followed up after a first psychotic episode in a community mental health team. All patients had suffered a first or early psychotic episode. The main differences between the two teams was that the ad-hoc team was assertive in its approach, offered more structured psycho-education, relapse prevention and psycho-social interventions, and had a policy of using atypical anti-psychotics at the lowest effective dose. There were many differences in outcome measures at the end of three years between the two groups. The EI patients are more likely to be taking medication at the end of three years. They are more compliant with medication. They are more likely to be prescribed Atypical Medication. The EI patients are more likely to have returned to Work or Education. The EI patients are more likely to remain living with their families. They are less likely to suffer depression to the extent of requiring anti-depressants. They appear to commit less suicide attempts. The patients in the EI service also appear to be less likely to suffer relapse and re-hospitalisation, and are less likely to have involuntary admission to hospital. They have systematic relapse prevention plans based on Early Warning Signs. They and their families receive more psycho-education. These indications suggest that the EI patients are at the end of three years better able to manage their illness/vulnerability on their own than the CMHT patients. More patients in the EI group stopped using illicit drugs than in the CMHT group. All the above changes were statistically significant except for the total improvement in employment status and education status, which however approached significance. These results suggest that an ad-hoc Early Intervention Team is more effective than standard Community Mental Health Team in treating psychotic illness.