Background Discontinuation of antipsychotic medication may be linked to high risk of relapse, hospitalization and mortality. This study investigated the use and discontinuation of antipsychotics in individuals with first-episode schizophrenia in relation to cohabitation, living with children, employment, hospital admission and death. Methods Danish registers were used to establish a nationwide cohort of individuals > 18 years with schizophrenia included at the time of diagnosis in1995-2013. Exposure was antipsychotic medication calculated using defined daily dose and redeemed prescriptions year 2-5. Outcomes year 5-6 were analysed using binary logistic, negative binomial and Cox proportional hazard regression. Results Among 21 351, 9.3% took antipsychotics continuously year 2-5, 38.6% took no antipsychotics, 3.4% sustained discontinuation and 48.7% discontinued and resumed treatment. At follow-up year 6, living with children or employment was significantly higher in individuals with sustained discontinuation (OR 1.98, 95% CI 1.53-2.56 and OR 2.60, 95% CI 1.91-3.54), non-sustained discontinuation (OR 1.25, 95% CI 1.05-1.48 and 2.04, 95% CI 1.64-2.53) and no antipsychotics (OR 2.00, 95% CI 1.69-2.38 and 5.64, 95% CI 4.56-6.97) compared to continuous users. Individuals with non-sustained discontinuation had more psychiatric hospital admissions (IRR 1.27, 95% CI 1.10-1.47) and longer admissions (IRR 1.68, 95% CI 1.30-2.16) year 5-6 compared to continuous users. Mortality during year 5-6 did not differ between groups. Conclusion Most individuals with first-episode schizophrenia discontinued or took no antipsychotics the first years after diagnosis and had better functional outcomes. Non-sustained discontinuers had more, and longer admissions compared to continuous users. However, associations found could be either cause or effect.