Few studies have assessed the comparative efficacy and safety of atypical and typical antipsychotic medications in patients within their first episode of psychosis. This study examined the effectiveness of the atypical antipsychotic olanzapine and the typical antipsychotic haloperidol in patients experiencing their first episode of a schizophrenia-related psychotic disorder over a 2-year treatment period. Two hundred and sixty-three patients were randomized to olanzapine or haloperidol in a doubleblind, multisite, international 2-year study. Clinical symptoms and side effects were assessed at baseline and longitudinally following randomization for the duration of the study. Olanzapine and haloperidol treatment were both associated with substantial and comparable reductions in symptom severity (the primary outcome measure) over the course of the study. However, the treatment groups differed on two secondary efficacy measures. Patients were less likely to discontinue treatment with olanzapine than with haloperidol: mean time (in days) in the study was significantly greater for those treated with olanzapine compared to haloperidol (322.09 vs. 230.38, p<0.0085). Moreover, remission rates were greater in patients treated with olanzapine as compared to those treated with haloperidol (57.25% vs. 43.94%, p<0.036). While extrapyramidal side effects were greater in those treated with haloperidol, weight gain, cholesterol level and liver function values were greater in patients treated with olanzapine. The data from this study suggest some clinical benefits for olanzapine as compared to haloperidol in first episode patients, which must be weighed against those adverse effects that are more likely with olanzapine.