Background: In the early course of schizophrenia, premorbid functioning, negative symptoms, and neurocognition have been robustly associated with several domains of daily functioning. Research with chronic schizophrenia patients suggests that attitudinal beliefs may influence daily functioning. However, these relationships have not been examined in recent-onset schizophrenia patients. Methods: The sample consisted of recent-onset schizophrenia outpatients (n = 71) who were on average 21.7 (SD = 3.3) years old, had 12.5 (SD = 1.8) years of education, and 5.9 (SD = 6.3) months since psychosis onset. Patients were assessed for premorbid adjustment, positive and negative symptoms, neurocognition, attitudinal beliefs, and daily functioning. Normal controls (n = 20) were screened for psychopathology and demographically matched to the patients. Results: Comparisons indicated that recent-onset patients had higher levels of dysfunctional attitudes and lower self-efficacy compared to healthy controls (t = 3.35, P <. 01; t = -4.1, P <. 01, respectively). Dysfunctional attitudes (r = -.34) and self-efficacy (r =. 36) were significantly correlated with daily functioning. Negative symptoms were found to mediate the relationship between self-efficacy and daily functioning (Sobel test, P <. 01), as well as between dysfunctional attitudes and daily functioning (Sobel test, P <. 05). Neurocognition was a significant mediator of the relationship between self-efficacy and daily functioning (Sobel test, P <. 05). Discussion: Early course schizophrenia patients have significantly more dysfunctional attitudes and lower self-efficacy than healthy subjects. Both self-efficacy and dysfunctional attitudes partially contribute to negative symptoms, which in turn influence daily functioning. In addition, self-efficacy partially contributes to neurocognition, which in turn influences daily functioning.