Background Numerous studies have reported links between theory of mind (ToM) deficits, neurocognition and negative symptoms with functional outcome in chronic schizophrenia patients. Although the ToM deficit has been observed in first-episode patients, fewer studies have addressed ToM as a possible trait marker, neurocognitive and symptom correlations longitudinally, and associations with later functioning. Method Recent-onset schizophrenia patients (n = 77) were assessed at baseline after reaching medication stabilization, and again at 6 months (n = 48). Healthy controls (n = 21) were screened, and demographically comparable with the patients. ToM was assessed with a Social Animations Task (SAT), in which the participants' descriptions of scenes depicting abstract visual stimuli 'interacting' in three conditions (ToM, goal directed and random) were rated for degree of intentionality attributed to the figures and for appropriateness. Neurocognition, symptoms and role functioning were also assessed. Results On the SAT, patients had lower scores than controls for both intentionality (p < 0.01) and appropriateness (p < 0.01) during the ToM condition, at baseline and 6 months. The ToM deficit was stable and present even in remitted patients. Analyses at baseline and 6 months indicated that for patients, ToM intentionality and appropriateness were significantly correlated with neurocognition, negative symptoms and role functioning. The relationship between ToM and role functioning was mediated by negative symptoms. Conclusions The ToM deficit was found in recent-onset schizophrenia patients and appears to be moderately trait-like. ToM is also moderately correlated with neurocognition, negative and positive symptoms, and role functioning. ToM appears to influence negative symptoms which in turn makes an impact on role functioning.