Patients with psychotic disorders are at high risk for type 2 diabetes mellitus, and there is increasing evidence that patients display glucose metabolism abnormalities before significant antipsychotic medication exposure. In the present study, we examined insulin action by quantifying insulin sensitivity in first-episode psychosis (FEP) patients and unaffected siblings, compared to healthy individuals, using a physiological-based model and comprehensive assessment battery. Twenty-two unaffected siblings, 18 FEP patients, and 15 healthy unrelated controls were evaluated using a 2-h oral glucose tolerance test (OGTT), with 7 samples of plasma glucose and serum insulin concentration measurements. Insulin sensitivity was quantified using the oral minimal model method. Lipid, leptin, free fatty acids, and inflammatory marker levels were also measured. Anthropometric, nutrient, and activity assessments were conducted; total body composition and fat distribution were determined using whole-body dual-energy X-ray absorptiometry. Insulin sensitivity significantly differed among groups (F = 6.01 and 0.004), with patients and siblings showing lower insulin sensitivity, compared to controls (P = 0.006 and 0.002, respectively). Body mass index, visceral adipose tissue area (cm2), lipids, leptin, free fatty acids, inflammatory markers, and activity ratings were not significantly different among groups. There was a significant difference in nutrient intake with lower total kilocalories/kilogram body weight in patients, compared to siblings and controls. Overall, the findings suggest that familial abnormal glucose metabolism or a primary insulin signaling pathway abnormality is related to risk for psychosis, independent of disease expression and treatment effects. Future studies should examine underlying biological mechanisms of insulin signaling abnormalities in psychotic disorders.