Mismatch negativity (MMN) is a neurophysiological indicator of the brain’s ability to extract relevant information from an irrelevant background. MMN has been described as a reliable biomarker of schizophrenia and more recently it has found to be impaired in the early stages of psychosis. In addition, drugs (including alcohol) that block glutamate’s N-methyl-D-aspartate receptor have been shown to reduce MMN. This study aims to determine whether risky alcohol consumption in young patients with psychotic disorder further impacts or changes their MMN response. Patients with high-alcohol use were found to show reduced temporal MMN amplitudes compared with patients with low-alcohol use and controls. In contrast, early psychosis patients with low-alcohol use showed reduced fronto-central MMN amplitudes compared with controls; whereas patients with high-alcohol use showed an intermediate response at these sites. Correlational analysis revealed distinct patterns of association between MMN and alcohol use in patients with early psychosis compared with controls. This study shows that early psychosis outpatients who engaged in risky drinking have decreased temporal MMN amplitudes, compared with their peers. This may reflect an additive effect of N-methyl-D-aspartate receptor hypofunction and high-alcohol consumption.