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The main aims of this study were to investigate whether the increased risk of psychotic disorders among certain immigrant groups is present in the next generation and whether having one parent born in Sweden has a protective effect on the risk of psychotic disorders among second-generation immigrants. In total, 2,243,546 individuals were followed from January 1, 1992, until December 31, 1999, for first hospital admission for schizophrenia or other psychoses. Cox regression was used to estimate hazard ratios. The highest risks of psychotic disorders were found among first-generation and second-generation Finns, after adjustment for socioeconomic status. Having one parent born in Sweden had no protective effect on the risk of being hospitalized for psychotic disorders among second-generation immigrants. The disabling symptoms of psychotic disorders call for increased awareness among clinicians and public health planners involved in the treatment and prevention of psychotic disorders, especially among certain immigrant groups.