First order theory of mind, as measured by the 'Reading the Mind in the Eyes Test' Revised, is impaired in schizophrenia. However, no study has investigated whether this occurs in first-episode schizophrenia. Also, it is unclear whether such a deficit is specific to schizophrenia, and whether convenience control samples, particularly undergraduate university students, represent valid comparison groups. This study investigated theory of mind ability, measured by the 'Reading the Mind in the Eyes Test' Revised, in a group of first-episode schizophrenia outpatients (n=13) and three control groups: outpatients with non-psychotic major depression (n=14), individuals from the general community (n=16) and from an undergraduate university course (n=27). The schizophrenia group exhibited significant theory of mind impairments compared to both non-psychiatric control groups but not the depression group. Unexpectedly, the depression group was not significantly impaired compared to the community control group, and the university control group exhibited superior theory of mind ability relative to all three groups. The findings indicate theory of mind deficits in first episode schizophrenia and support the implementation of theory of mind interventions in first-episode schizophrenia treatment programs. Results also indicate that community rather than university control groups represent more valid comparison groups in first-episode schizophrenia research.