Increased perfusion of the hippocampal CA1 subfield is a clinical biomarker for early psychosis that also predicts hippocampal volume loss. Converging evidence suggests that CA1 hyperperfusion reflects excessive glutamatergic transmission which drives psychosis and may produce excitotoxic hippocampal injury that is associated with poor outcomes. Antipsychotics reduce hippocampal activity but may worsen hippocampal injury via oxidative stress from increased dopamine release. We recently demonstrated hippocampal volume loss at an annualized mean rate of 6.5% during the first 8 weeks of antipsychotic treatment. Levetiracetam, an anticonvulsant, normalizes excessive glutamatergic and dopaminergic neurotransmission by targeting the synaptic vesicle protein (SVP2A). Levetiracetam is neuroprotective in animal and human models of hippocampal hyperactivity. We hypothesize that levetiracetam will protect against hippocampal volume loss and improve clinical outcomes in early psychosis by reducing excessive glutamate and dopamine transmission. Approach: We will establish target engagement and dose selection by measuring the effects of levetiracetam 185 mg and 500 mg on hippocampal perfusion in a placebo-controlled trial in 24 medication- naïve individuals with first episode psychosis. We will then study the optimal levetiracetam dose added to antipsychotic in a 12-week placebo-controlled trial in 84 medication naïve individuals with first episode psychosis. We will examine whether levetiracetam prevents hippocampal volume loss and improves clinical symptoms and cognition and will explore potential mediators and modulators of effect. Significance: By correcting a fundamental dysregulation of hippocampal neurotransmission, we believe levetiracetam will improve initial treatment response in first episode psychosis and fundamentally change the course of illness.