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Numerous studies have documented high rates of functional impairment in patients with schizophrenia and bipolar disorder. However, this impairment appears early in the course of the illness. The purpose of the present study was to validate the Functioning Assessment Short Test (FAST) by comparing it with the Strauss-Carpenter Scale for use as an instrument to assess functional impairment in subjects with first psychotic episodes. The study was conducted on 53 patients admitted to Santiago Apostol Hospital because of a first psychotic episode. The FAST showed high internal consistency both at baseline and at 6 months as well as at 1 year. Concurrent validity showed a highly significant negative correlation at each time point. The FAST also showed good reliability and discriminant validity. The FAST showed strong psychometric properties and is a valid instrument for use in clinical practice, clinical trials, and research settings in subjects with first psychotic episodes.