Background: Understanding the longitudinal course of negative symptoms, especially in relationship to functioning, in the early phase of schizophrenia is crucial to developing intervention approaches. The course of negative symptoms and daily functioning was examined over a 1-year period following a recent onset of schizophrenia and at an 8-year follow-up point. Methods: The study included 149 recent-onset schizophrenia patients who had a mean age of 23.7 (SD = 4.4). years and mean education of 12.9 (SD = 2.2). years. Negative symptom (BPRS and SANS) and functional outcome (SCORS) assessments were conducted frequently by trained raters. Results: After antipsychotic medication stabilization, negative symptoms during the first outpatient year were moderately stable (BPRS ICC = 0.64 and SANS ICC = 0.66). Despite this overall moderate stability, 24% of patients experienced at least one period of negative symptoms exacerbation. Furthermore, entry level of negative symptoms was significantly associated with poor social functioning (r= - .34, p< .01) and work/school functioning (r= - .25, p< .05) at 12. months, and with negative symptoms at the 8-year follow-up (r= .29, p< .05). Discussion: Early negative symptoms are fairly stable during the first outpatient year, are predictors of daily functioning at 12. months, and predict negative symptoms 8. years later. Despite the high levels of stability, negative symptoms did fluctuate in a subsample of patients. These findings suggest that negative symptoms may be an important early course target for intervention aimed at promoting recovery.