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ObjectivesThis study explores the incidence of first episode psychosis (FEP) in young people residing in the Top End of the Northern Territory and explores factors associated with FEP hospitalisations in the two years post-diagnosis.MethodsRetrospective review of data from all people aged between 15- and 24-years old presenting to health services with FEP between January 2012 and December 2018. Demographic and clinical data were collected at intervals in the two years after FEP.ResultsData from 313 youths with FEP were included in the study (214 Aboriginal and Torres Strait Islander peoples). The overall FEP incidence was 203 per 100,000 person-years; however, this was much higher among Aboriginal and Torres Strait Islander peoples (435 per 100,000). Being Indigenous and living remotely were significantly associated with longer hospitalisations two years after initial diagnosis.ConclusionThis study demonstrates an elevated incidence of FEP among young people in the Top End of Australia. Psychosis disproportionately affected Aboriginal and Torres Strait Islander peoples, and this group had longer hospitalisations in the two years following FEP. This problem is multifactorial, and findings suggest that sociocultural disadvantage may play a role.