•Patients with psychosis have a significant Facial Emotion Recognition (FER) deficit.•FER deficit is present early and increases along the psychosis continuum.•Fear recognition is similarly impaired in high-risk, first-episode and schizophrenia.•Psychotic-like experiences and symptoms are related to FER.•FER should be included in evaluation and treatment from early stages of the illness. Our study aimed to explore the recognition of specific emotions across the course of psychosis. A visual task representing the six basic emotions was used to assess facial emotion recognition (FER) in 204 healthy controls classified into 152 low-risk (LR) and 52 high-risk for psychosis (HR), following a psychometric risk approach; and 100 patients: 44 with first-episode psychosis (FEP) and 56 with multi-episode schizophrenia-spectrum disorders (MES). First, we performed a MANCOVA to compare the four conditions. Next, we conducted a logistic regression to explore whether specific FER deficits predicted the presence of psychosis. Finally, we investigated the relationships of FER with psychosis-like experiences (PLEs) and psychotic symptoms. Global FER, anger and fear recognition were impaired in HR, FEP and MES. No differences between HR and FEP appeared. Moreover, fear and anger correctly classified 83% of individuals into LR or psychosis. FER was associated with PLEs and psychotic symptoms. Concluding, FER is early impaired in HR individuals and increases along the psychosis continuum. However, fear recognition is similarly impaired throughout the illness, suggesting a possible vulnerability marker. Furthermore, deficits in anger and fear recognition predicted the presence of psychosis. Therefore, we suggest that FER may be essential in detecting psychosis risk.