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OBJECTIVE: Previous studies, mostly involving neuroleptic-treated patients, have suggested enlarged basal ganglia size in schizophrenia. The authors sought to examine basal ganglia volume in neuroleptic-naive psychotic patients. METHOD: Magnetic resonance imaging volumetric studies were conducted in newly diagnosed neuroleptic-naive schizophrenic and nonschizophrenic psychotic patients and in matched healthy comparison subjects. RESULTS: Both patient groups had bilaterally reduced caudate, but not putamen, volumes, compared to the healthy subjects, after adjustment for intracranial volume. CONCLUSIONS: Decreases in caudate volume in newly diagnosed psychotic patients may be related to the primary pathophysiology of these disorders; prior observations of increased caudate volume may reflect effects of neuroleptic treatment.