The goal of the present study was to characterize sleep organization in first episode and neuroleptic-naive patients with schizophrenia and to evaluate relationships between those sleep parameters and clinical symptoms. Eleven patients with acute schizophrenia never treated with neuroleptics were compared to 11 healthy controls. Sleep stages and phasic events (sleep spindles and rapid-eye-movements during REM sleep (REMs) were visually identified. Clinical symptoms were assessed using the Brief Psychiatric Rating Scale (BPRS). Compared to controls, patients with schizophrenia had difficulty initiating sleep, decreased stage 4 duration, reduced rapid eye movement (REM) sleep latency, and normal sleep spindles and REMs densities. Positive symptoms correlated negatively with REM sleep latency. The BPRS total score correlated negatively with REM sleep duration and REMs density. The present results indicate that first episode and neuroleptic-naive patients with schizophrenia have difficulties initiating, but not maintaining, sleep. These results also confirm that the duration of stage 4 and REM sleep latency are reduced in first episode and neuroleptic-naive patients with schizophrenia. The fact that measures of REM sleep correlate with clinical scales of schizophrenia suggests that REM sleep physiology shares common substrates with symptoms of this disease.