Background Grey matter (GM) reduction is a consistent observation in established late stages of schizophrenia, but patients in the untreated early stages of illness display an increase as well as a decrease in GM distribution relative to healthy controls (HC). The relative excess of GM may indicate putative compensatory responses, though to date its relevance is unclear. Methods 343 first-episode treatment-naïve patients with schizophrenia (FES) and 342 HC were recruited. Multivariate source-based morphometry was performed to identify covarying \u27networks\u27 of grey matter concentration (GMC). Neurocognitive scores using the Cambridge Neuropsychological Test Automated Battery (CANTAB) and symptom burden using the Positive and Negative Symptoms Scale (PANSS) were obtained. Bivariate linear relationships between GMC and cognition/symptoms were studied. Results Compared to healthy subjects, FES had prominently lower GMC in two components; the first consists of the anterior insula, inferior frontal gyrus, anterior cingulate and the second component with the superior temporal gyrus, precuneus, inferior/superior parietal lobule, cuneus, and lingual gyrus. Higher GMC was seen in adjacent areas of the middle and superior temporal gyrus, middle frontal gyrus, inferior parietal cortex and putamen. Greater GMC of this component was associated with lower duration of untreated psychosis, less severe positive symptoms and better performance on cognitive tests. Conclusions In untreated stages of schizophrenia, both a distributed lower and higher GMC is observable. While the higher GMC is relatively modest, it occurs across frontoparietal, temporal and subcortical regions in association with reduced illness burden suggesting a compensatory role for higher GMC in the early stages of schizophrenia