While structural abnormalities of the dorsolateral prefrontal cortex (DLPFC) may pre-date and predict psychosis onset, the relationships between functional deficits, cognitive and psychosocial impairments has yet to be explored in the at-risk period. An established measure of cognitive control (AXCPT) was administered to demographically matched clinical-high-risk (CHR; n=25), first-episode schizophrenia (FE; n=35), and healthy control (HC; n=35) participants during functional magnetic resonance imaging (fMRI) to investigate these relationships. CHR and FE individuals demonstrated impaired context processing and reduced DLPFC activation relative to HC individuals during increased cognitive control demands. FE and CHR individuals' ability to increase DLPFC activity in response to cognitive control demands was associated with better task performance. Task performance was also associated with severity of disorganization and poverty symptoms in FE participants. These findings support more extensive studies using fMRI to examine the clinical significance of prefrontal cortical functioning in the earliest stages of psychosis.