ABSTRACT: BACKGROUND:Neurocognitive impairments robustly predict functional outcome. However, heterogeneity in neurocognition is common within diagnostic groups, and data-driven analyses reveal homogeneous neurocognitive subgroups cutting across diagnostic boundaries. AIMS:To determine whether data-driven neurocognitive subgroups of young people with emerging mental disorders are associated with 3-year functional course. METHOD:Model-based cluster analysis was applied to neurocognitive test scores across nine domains from 629 young people accessing mental health clinics. Cluster groups were compared on demographic, clinical and substance-use measures. Mixed-effects models explored associations between cluster-group membership and socio-occupational functioning (using the Social and Occupational Functioning Assessment Scale) over 3 years, adjusted for gender, premorbid IQ, level of education, depressive, positive, negative and manic symptoms, and diagnosis of a primary psychotic disorder. RESULTS:Cluster analysis of neurocognitive test scores derived three subgroups described as 'normal range' (n = 243, 38.6%), 'intermediate impairment' (n = 252, 40.1%), and 'global impairment' (n = 134, 21.3%). The major mental disorder categories (depressive, anxiety, bipolar, psychotic and other) were represented in each neurocognitive subgroup. The global impairment subgroup had lower functioning for 3 years of follow-up; however, neither the global impairment (B = 0.26, 95% CI -0.67 to 1.20; P = 0.581) or intermediate impairment (B = 0.46, 95% CI -0.26 to 1.19; P = 0.211) subgroups differed from the normal range subgroup in their rate of change in functioning over time. CONCLUSIONS:Neurocognitive impairment may follow a continuum of severity across the major syndrome-based mental disorders, with data-driven neurocognitive subgroups predictive of functional course. Of note, the global impairment subgroup had longstanding functional impairment despite continuing engagement with clinical services.