The genetic factors determining the progression of prodromal syndromes to first episode schizophrenia have remained enigmatic to date. In a unique prospective multicentre trial, we assessed whether variants at the d-amino acid oxidase activator (DAOA)/G72 locus influence progression to psychosis. Young subjects with a prodromal syndrome were observed prospectively for up to 2 years to assess the incidence of progression to schizophrenia or first episode psychosis. Of the 82 probands with a prodromal syndrome, 21 probands experienced progression to psychosis within the observation period. Assessment of nine common variants in the DAOA/G72 locus yielded two variants with the predictive value for symptom progression: all four probands with the rs1341402 CC genotype developed psychosis compared with 17 out of 78 probands with the TT or CT genotypes (χ2 = 12.348; df = 2; p = 0.002). The relative risk for progression to psychosis was significantly increased in the CC genotype: RR = 4.588 (95% CI = 2.175–4.588). Similarly, for rs778294, 50% of probands with the AA genotype, but only 22% of probands with a GG or GA genotype progressed to psychosis (χ2 = 7.027; df = 2; p = 0.030). Moreover, haplotype analysis revealed a susceptibility haplotype for progression to psychosis. This is one of the first studies to identify a specific genetic factor for the progression of prodromal syndromes to schizophrenia, and further underscores the importance of the DAOA/G72 gene for schizophrenia.