Results of first-episode psychosis studies have shown that the diagnosis of schizophrenia is more stable across time than other diagnoses within the psychosis spectrum disorders. The objective of this study was to determine the diagnostic stability in a sample of first-episode patients and to determine the factors that predicted a diagnostic shift. Two hundred and twenty-eight individuals presenting for treatment with a first episode of non-affective psychosis were diagnosed at baseline and at one-year follow-up. Symptoms, functioning and cognition were also assessed. The overall consistency of diagnoses was 68% with an increase to 89% when schizophreniform was excluded. Schizophrenia was found to have the highest prospective consistency (95%), schizophreniform was less stable (36%) with shifts towards schizophrenia and other psychotic disorders were the least stable with a prospective consistency of 62%. Schizophrenia had the largest influx of cases at follow-up with a retrospective consistency of 63%. Schizophrenia can be reliably diagnosed at the initial assessment. There are clinical implications for dealing with the risk of shifting diagnosis for those who present with schizophrenia spectrum and other psychotic disorders.