24 adolescents and young adults between the ages of 12 and 25 who are at high risk of developing psychosis and exhibit paranoid ideation will be recruited to participate in a pilot randomized controlled trial. Subjects will be randomly assigned to the intervention (GF-CBT)or control (symptom monitoring) groups. GF-CBT is based on a cognitive neuropsychiatric model of delusions, and incorporates recent developments in learning and cognitive theories. GF-CBT consists of individual, group, and family group sessions. The three-part program teaches adolescents and family members Cognitive Behavioral skills that they can continue using on their own after completion of the program. Preliminary efficacy of the intervention will be evaluated using standardized measures by blind evaluators conducted at baseline, post-treatment, and post-termination follow-up over the next 2 years. Hypotheses: (a) GF-CBT will be associated with: high rate of remission from "at risk status" and low rates of transition to psychosis (defined by CAARMS criteria); greater improvements in severity of symptoms; and improved functioning; (b) decrease in family members'level of stress, and improved coping; (c) Family members will demonstrate proficiency in CBT Skills.