The observations of family members as well as the results of past research suggest that a variety of developmental pathways can precede the onset of schizophrenia in early adulthood. In this article, we describe recent findings from our research on the childhood precursors of schizophrenia. Taken together, the results indicate that childhood behavioral, emotional, and motoric dysfunction occur at a higher rate in preschizophrenia subjects when compared to control subjects. Further, there are developmental changes as well as significant variability among schizophrenia patients in the nature and severity of childhood impairment. Drawing on the prevailing diathesis-stress model, we explore the moderating role that stress exposure and reactivity may play in the expression of the organic diathesis for schizophrenia. Specifically, we consider the role of the biological stress response in the production of developmental changes and individual differences in the pathways to schizophrenia. Given extant models of dopamine involvement in the neuropathology of schizophrenia, stress-induced Cortisol release may alter the expression of subcortical abnormalities in dopamine neurotransmission. Thus, we present a neural mechanism for the hypothesized behavioral sensitivity to stress exposure in schizophrenia, and explore the capacity of the model to account for the changing behavioral manifestations of vulnerability.