Importance: In most patients, a prodromal period precedes the onset of schizophrenia. Although clinical criteria for identifying the psychosis risk syndrome (PRS) show promising predictive validity, assessment of neurophysiologic abnormalities in at-risk individuals may improve clinical prediction and clarify the pathogenesis of schizophrenia. Objective: To determine whether P300 event-related potential amplitude, which is deficient in schizophrenia, is reduced in the PRS and associated with clinical outcomes. Design, Setting, and Participants: Auditory P300 data were collected as part of the multisite, case-control North American Prodrome Longitudinal Study (NAPLS-2) at 8 university-based outpatient programs. Participants included 552 individuals meeting PRS criteria and 236 healthy controls with P300 data. Auditory P300 data of participants at risk who converted to psychosis (n = 73) were compared with those of nonconverters who were followed up for 24 months and continued to be symptomatic (n = 135) or remitted from the PRS (n = 90). Data were collected from May 27, 2009, to September 17, 2014, and were analyzed from December 3, 2015, to May 1, 2019. Main Outcomes and Measures: Baseline electroencephalography was recorded during an auditory oddball task. Two P300 subcomponents were measured: P3b, elicited by infrequent target stimuli, and P3a, elicited by infrequent nontarget novel stimuli. Results: This study included 788 participants. The PRS group (n = 552) included 236 females (42.8%) (mean [SD] age, 19.21 [4.38] years), and the healthy control group (n = 236) included 111 females (47.0%) (mean [SD] age, 20.44 [4.73] years). Target P3b and novelty P3a amplitudes were reduced in at-risk individuals vs healthy controls (d = 0.37). Target P3b, but not novelty P3a, was significantly reduced in psychosis converters vs nonconverters (d = 0.26), and smaller target P3b amplitude was associated with a shorter time to psychosis onset in at-risk individuals (hazard ratio, 1.45; 95% CI, 1.04-2.00; P =.03). Participants with the PRS who remitted had baseline target P3b amplitudes that were similar to those of healthy controls and greater than those of converters (d = 0.51) and at-risk individuals who remained symptomatic (d = 0.41). Conclusions and Relevance: In this study, deficits in P300 amplitude appeared to precede psychosis onset. Target P3b amplitudes, in particular, may be sensitive to clinical outcomes in the PRS, including both conversion to psychosis and clinical remission. Auditory target P3b amplitude shows promise as a putative prognostic biomarker of clinical outcome in the PRS