Impaired working memory is a core feature of schizophrenia and is linked with altered engagement the lateral prefrontal cortex. Although altered PFC activation has been reported in people with increased risk of psychosis, at present it is not clear if this neurofunctional alteration differs between familial and clinical risk states and/or increases in line with the level of psychosis risk. We addressed this issue by using functional MRI and a working memory paradigm to study familial and clinical high-risk groups. We recruited 17 subjects at ultra-high-risk (UHR) for psychosis, 10 non-affected siblings of patients with schizophrenia (familial high risk [FHR]) and 15 healthy controls. Subjects were scanned while performing the N-back working memory task. There was a relationship between the level of task-related deactivation in the medial PFC and precuneus and the level of psychosis risk, with deactivation weakest in the UHR group, greatest in healthy controls, and at an intermediate level in the FHR group. In the high-risk groups, activation in the precuneus was associated with the level of negative symptoms. These data suggest that increased vulnerability to psychosis is associated with a failure to deactivate in the medial PFC and precuneus during a working memory task, and appears to be most evident in subjects at clinical, as opposed to familial high risk.