The aim of this study was to compare the gray matter segments from T1 structural MR images of the brain in first-episode schizophrenic subjects (n = 34) and normal control subjects (n = 36) using automated voxel-based morphometry (VBM). This study is novel in that few studies have examined subjects in their first episode of schizophrenia. The subjects were recruited for the Edinburgh High Risk project and regional brain volumes were previously measured using a semi-automated volumetric region of interest (ROI) method of analysis. The primary interest was to compare the results from the compatible parts of the ROI study and the primary VBM approach. Our secondary interest was to compare the results of a study-specific template that was constructed from the control group to those using the generic T1 template (152 Montreal Neurological Institute brains) supplied with SPM99 (statistical parametric mapping). The images were processed and statistically analyzed using the SPM99 program. VBM analysis identified significant decreases in gray matter in the schizophrenics relative to the normal control group at the corrected voxel level (P < 0.05) in the right anterior cingulate, right medial frontal lobe, left middle temporal gyrus, left postcentral gyrus, and the left limbic lobe. There were no increases in gray matter in the schizophrenics relative to the control group. The construction of a customized template appeared to improve the detection of structural abnormalities. The analyses were subsequently restricted to voxels within the amygdala-hippocampal complex using the SPM small-volume correction. This identified gray matter decreases in the schizophrenics, at the corrected voxel level (P < 0.05), in the left and right uncus and parahippocampal gyri and the right amygdala. These results are compatible with and extend the relevant findings of the previous volumetric ROI analysis, when allowing for the differences between the methods and interpretation of their results.