Evidence points toward a relationship between longer duration of untreated psychosis (DUP) and worse long-term outcomes in patients with first episode psychosis (FEP), but the underlying neurobiology remains poorly understood. Proton magnetic resonance spectroscopy studies have reported altered hippocampus glutamatergic neurotransmission, and structural MRI as reported hippocampal atrophy that may be associated with memory impairment in schizophrenia. Here, we quantify left hippocampus glutamate (Glx) and left hippocampus subfield volumes in 54 antipsychotic-naive FEP and 41 healthy controls (HC), matched on age, sex, and parental occupation. While there were no significant group difference in Glx levels, hippocampal Glx levels were significantly higher in those who underwent a long DUP (>12 months) compared to those with a short DUP, and compared to HC. Compared to HC, FEP had significantly reduced whole hippocampus volume, as well as of CA1, CA4, granule cell layer, subiculum, and presubiculum subfields. Smaller whole hippocampal volume, as well as CA1, molecular layer, subiculum, presubiculum, and hippocampal tail volumes were significantly associated with longer DUP. However, we found no significant association between hippocampal Glx levels and hippocampal volume or subfields, suggesting that these alterations are not related, or their relationship does not follow a linear pattern. However, our results strongly suggest that one or several pathophysiological processes underlie the DUP. Importantly, our data highlight the critical need for reducing the DUP and for early pharmacological intervention with the hope to prevent structural deficits and, hopefully, improve clinical outcomes.