AbstractAimResearch suggests that family support promotes recovery and is a key component of a successful early intervention programme. However, very little is known about family functioning in families that are coping with the onset of a psychotic illness and the factors that help to foster adaptive family functioning during this challenging time. The purpose of this study was to understand the individual, caregiver and family factors that are associated with adaptive family functioning in early episode psychosis.MethodsAn online survey with 107 family caregivers of an individual with early psychosis was used to examine relationships among various caregiver and family system variables such as caregiver appraisals, coping strategies, quality of life, perceived helpfulness of support systems and family functioning. Family functioning was assessed using a multi‐dimensional approach and measured along dimensions of cohesion and flexibility.ResultsFamily members of an individual with early psychosis reported more family difficulties across dimensions of cohesion and flexibility. Family members’ cognitive appraisals about the illness, its consequences and one's caregiving role were significant predictors of wellbeing. Negative appraisals were strongly associated with lower caregiver quality of life, whereas the presence of positive coping strategies was associated with better caregiver quality of life. Finally, positive caregiver appraisals predicted adaptive family functioning.ConclusionsFamily functioning is a complex and multi‐faceted construct. The findings from this study have important implications for the field of early intervention in psychosis and could inform relevant treatment targets.