Antipsychotics are thought to improve schizophrenia symptoms through the antagonism of dopamine D2 receptors, which are abundant mainly in subcortical regions. By introducing functional gradient, a novel approach to identify hierarchy alterations by capturing the similarity of whole brain fucntional connectivity (FC) profiles between two voxels, the present study aimed to characterize how the subcortical gradient is associated with treatment effects and response in first-episode schizophrenia in vivo. Two independent samples of first-episode schizophrenia (FES) patients with matched healthy controls (HC) were obtained: the discovery dataset included 71 patients (FES) and 64 HC at baseline, and patients were re-scanned after either 6 weeks (FES N = 33) or 12 months (FES N = 57) of antipsychotic treatment, of which 19 patients finished both 6-week and 12-month evaluation. The validation dataset included 22 patients and 24 HC at baseline and patients were re-scanned after 6 weeks. Gradient metrics were calculated using BrainSpace Toolbox. Voxel-based gradient values were generated and group-averaged gradient values were further extracted across all voxels (global), three systems (thalamus, limbic and striatum) and their subcortical subfields. The comparisons were conducted separately between FES and HC for investigating illness effects, and between FES/FES and FES for treatment effects. Correlational analyses were then conducted between the longitudinal gradient alterations and the improvement of clinical ratings. Before treatment, schizophrenia patients exhibited an expanded range of global gradient scores compared to HC which indicated functional segregation within subcortical systems. The increased gradient in limbic system and decreased gradient in thalamic and striatal system contributed to the baseline abnormalities and led to the disruption of the subcortical functional integration. After treatment, these disruptions were normalized and the longitudinal changes of gradient scores in limbic system were significantly associated with symptom improvement. Similar illness and treatment effects were also observed in the validation dataset. By measuring functional hierarchy of subcortical organization, our findings provide a novel imaging marker that is sensitive to treatment effects and may make a promising indicator of treatment response in schizophrenia.