Clinical observation and retrospective and prospective studies of relapsing psychosis have demonstrated that early symptoms of decompensation are observable in one half to two thirds of patients over a period of 1 to 4 weeks. Whilst the sensitivity of prodromal symptoms is established, their specificity is less certain, particularly at the first episode. The appearance of an “at risk” mental state, if not leading to decompensation, may nevertheless be part of a “transitional” stage to psychosis that is affected by psychological factors concerning the attributions that are made about a change in mental life. The research on prodromal signs is reviewed, with three areas of focus: prodromes as continuous versus discrete phenomena, sensitivity and specificity, and early intervention studies. A psychological model of the transitional process is described with case examples, together with an exploration of its implications for early intervention, again illustrated by case material.