Identifying individuals at risk for psychotic disorders is now a major focus of research. The key objectives of this work are to identify mechanisms underlying the emergence of psychosis and predict impending illness, with the goal of developing preventive interventions. Despite notable progress, there is a dearth of ethically informed policies to guide disclosure, documentation, and treatment practices. The limited predictive validity of psychosis-risk criteria and stigma surrounding psychotic disorders hinder such policy development. Thus, several challenging questions remain: Does the psychosis-risk designation achieve an adequate predictive power to indicate risk for a more serious disorder? When and how should individuals learn that they are at risk for a psychotic illness, and should such information be included in medical records? What, if any, treatment recommendations should be made? This article addresses these challenges and frames the central issues confronting ethically informed policies and practices for identifying and treating psychosis-risk syndromes.