Impairments in early visual face perception are well documented in patients with schizophrenia. Specifically, event-related potential (ERP) research in patients with schizophrenia has demonstrated deficits in early sensory processing of stimulus properties (P1 component) and the structural encoding of faces (N170 component). However, it is not well understood if similar impairments are present in individuals at clinical high risk (CHR) for psychosis (ie, those in the putative prodromal stage of the illness). Thus, it is unknown if face perception deficits are the result of illness onset or are present in the high-risk period for the illness. The present study used the ERP technique to examine neural activation when viewing facial emotion expressions and objects in 44 CHR and 47 control adolescents and young adults (N = 91). P1 amplitude was similar across groups, indicating that early sensory processing impairments did not substantially contribute to face perception deficits in CHR youth. CHR youth exhibited reduced N170 amplitude compared to controls when viewing faces but not objects, implicating a specific deficit in the structural encoding of faces rather than a general perceptual deficit. Further, whereas controls demonstrated the expected face-selective N170 effect (ie, larger amplitude for faces than objects), CHR youth did not, which suggests that facial emotion expressions do not elicit the expected preferential perceptual processing for critical social information in individuals at CHR for psychosis. Together, these findings provide valuable information regarding the specific impairments contributing to face perception deficits in the high-risk period where treatment stands to aid in preventing illness progression.