Objective: The therapeutic alliance has long been considered an essential part of treatment. Despite a large body of work examining the alliance–outcome relationship, very few studies have examined it within individuals with first episode psychosis (FEP). Method: The present study examined the alliance at Session 3, 4, or 5 and its relationship to 2-year treatment outcomes and therapy participation in a sample of 144 FEP clients who received specialized FEP treatment at U.S. clinics. Furthermore, we examined between-therapist and within-therapist (client) effects of the alliance on outcomes. Results: Results indicated that a better alliance was related to improved mental health recovery, psychological well-being, quality of life, total symptoms, negative symptoms, and disorganized symptoms at the end of treatment. In addition, the between-therapist effect of the alliance was significantly related to better mental health recovery whereas the within-therapist (client) effect of the alliance was related to better quality of life, total symptoms, and negative symptoms at the end of treatment. Conclusions: A stronger alliance was related to improved treatment outcomes in FEP. Future work should consider examining mediators of the alliance-outcome relationship as well as how changes in the alliance relate to changes in outcomes over time. (PsycINFO Database Record (c) 2019 APA, all rights reserved)