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BACKGROUND: Recent findings suggest that attenuated psychotic symptoms (APS) might serve as a risk factor for general mental health impairment in help-seeking youth. The current study was designed to test this possibility by examining the prognostic significance of APS in a large cohort of help-seeking youth not selected for psychosis risk. METHOD: 465 youth aged 12-25 referred to general youth mental health services were grouped as either APS + or APS- based on whether or not they met ‘ultra high risk’ for psychosis APS risk criteria as assessed using the Comprehensive Assessment of At Risk Mental States (CAARMS). They completed clinical assessments at baseline and at 12-month follow-up, measuring a range of psychopathology (depression, anxiety, eating disorders, general psychological distress, substance abuse) and psychosocial functioning. RESULTS: APS + had significantly poorer outcomes at 12-months on a range of clinical variables, even after adjusting for baseline scores and amount of treatment received. However, the APS + group showed greater improvement in functioning at follow-up compared to APS-. CONCLUSION: Attenuated psychotic symptoms are a prognostic indicator of persistent transdiagnostic mental health problems and reduced response to treatment in help-seeking youth over the short term. Hence, it is critical to screen and assess attenuated psychotic symptoms at the primary and secondary mental health services level, especially given that these subclinical symptoms are rarely voluntarily reported.